Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.
Yes ý No o

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.
Yes o No ý

Note  Checking the box above will not relieve any registrant required to file reports pursuant to
Section 13 or 15(d) of the Exchange Act from their obligations under those Sections.

Indicate
by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding
12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Yes ý No o

Indicate by checkmark whether the registrant has submitted electronically and posted on its corporate website, if any, every Interactive Data File required to be submitted and
posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was
required to submit and post such files. Yes ý No o

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§229.405 of this chapter) is not
contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this
Form 10-K or any amendment to this Form 10-K. ý

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company (as defined
in Rule 12b-2 of the Act).

Large accelerated filer ý

Accelerated filer o

Non-accelerated filer o(Do not check if a smaller reporting company)

Smaller reporting company o

Indicate
by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).
Yes o No ý

Aggregate market value of the voting stock held by non-affiliates of the registrant on July 31, 2010 was $37,014,234,947, based on the closing price of $51.32
per share of Common Stock as reported on the New York Stock Exchange Composite Index.

Indicate
the number of shares outstanding of each of registrant's classes of Common Stock, as of the latest practicable date. Total shares of Common Stock, par value $0.0833, outstanding at
March 7, 2011 were 693,063,352.

DOCUMENTS INCORPORATED BY REFERENCE

1. Portions
of Target's Proxy Statement to be filed on or about April 28, 2011 are incorporated into Part III.

Target Corporation (the Corporation or Target) was incorporated in Minnesota in 1902. We operate as two reportable segments: Retail and
Credit Card.

Our
Retail Segment includes all of our merchandising operations, including our fully integrated online business. We offer both everyday essentials and fashionable, differentiated
merchandise at discounted prices. Our ability to deliver a shopping experience that is preferred by our customers, referred to as "guests," is supported by our strong supply chain and technology
infrastructure, a devotion to innovation that is ingrained in our organization and culture, and our disciplined approach to managing our current business and investing in future growth. As a component
of the Retail Segment, our online presence is designed to enable guests to purchase products seamlessly either online or by locating them in one of our stores with the aid of online research and
location tools. Our online shopping site offers similar merchandise categories to those found in our stores, excluding food items and household essentials.

Our fiscal year ends on the Saturday nearest January 31. Unless otherwise stated, references to years in this report relate to
fiscal years, rather than to calendar years. Fiscal year 2010 ended January 29, 2011, and consisted of 52 weeks. Fiscal year 2009 ended January 30, 2010, and consisted of
52 weeks. Fiscal year 2008 ended January 31, 2009, and consisted of 52 weeks.

For
information on key financial highlights, see the items referenced in Item 6, Selected Financial Data, and Item 7, Management's Discussion and Analysis of Financial
Condition and Results of Operations, of this Annual Report on Form 10-K.

Seasonality

Due to the seasonal nature of our business, a larger share of annual revenues and earnings traditionally occurs in the fourth quarter
because it includes the peak sales period from Thanksgiving to the end of December.

Merchandise

We operate Target general merchandise stores, the majority of which offer a wide assortment of general merchandise and a more limited
food assortment than traditional supermarkets. During 2009 and 2010 we completed store remodels that enabled us to offer an expanded food assortment in many of our general merchandise stores. The
expanded food assortment includes some perishables and some additional dry, dairy and frozen items. In addition, we operate SuperTarget® stores with general merchandise items and a full
line of food items comparable to that of traditional supermarkets. Target.com offers a wide assortment of general merchandise including many items found in our stores and a complementary assortment,
such as extended sizes and colors, sold only online. A significant portion of our sales is from national brand merchandise. We also sell many products under our owned and exclusive brands. Owned
brands include merchandise sold under private-label brands including, but not limited to, Archer Farms®, Archer Farms® Simply Balanced, Boots &
Barkley®, choxie®, Circo®, Durabuilt®, Embark®, Gilligan & O'Malley®, itsoTM, Market Pantry®,
Merona®, Play Wonder®, Room Essentials®,

Effective
inventory management is key to our ongoing success. We utilize various techniques including demand forecasting and planning and various forms of replenishment management. We
achieve effective inventory management by being in-stock in core product offerings, maintaining positive vendor relationships, and carefully planning inventory levels for seasonal and
apparel items to minimize markdowns.

Apparel and accessories includes apparel for women, men, boys, girls, toddlers, infants and newborns. It also includes intimate apparel, jewelry,
accessories and shoes.

Home furnishings and décor includes furniture, lighting, kitchenware, small appliances, home décor, bed and bath, home
improvement, automotive and seasonal merchandise such as patio furniture and holiday décor.

The vast majority of our merchandise is distributed through our network of distribution centers. We operated 37 distribution centers,
including 4 food distribution centers, at January 29, 2011. General merchandise is shipped to and from our distribution centers by common carriers. In addition,
third parties distribute certain food items. Merchandise sold through Target.com is distributed through our own distribution network, through third parties, or shipped directly from vendors.

Employees

At January 29, 2011, we employed approximately 355,000 full-time, part-time and seasonal employees,
referred to as "team members." During our peak sales period from Thanksgiving to the end of December, our employment levels peaked at approximately 400,000 team members. We consider our team member
relations to be good. We offer a broad range of company-paid benefits to our team members. Eligibility for, and the level of, these benefits varies, depending on team members'
full-time or part-time status, compensation level, date of hire

Because of the seasonal nature of our business, our working capital needs are greater in the months leading up to our peak sales period
from Thanksgiving to the end of December. The increase in working capital during this time is typically financed with cash flow provided by operations and short-term borrowings.

Additional
details are provided in the Liquidity and Capital Resources section in Item 7, Management's Discussion and Analysis of Financial Condition and Results of Operations.

In
our Credit Card Segment, our primary mission is to deliver financial products and services that drive sales and deepen guest relationships at Target. Our financial products compete
with those of other issuers for market share of sales volume. Our ability to positively differentiate the value of our financial products primarily through our rewards programs, terms, credit line
management, and guest service determines our competitive position among credit card issuers.

Intellectual Property

Our brand image is a critical element of our business strategy. Our principal trademarks, including Target, SuperTarget and our
"Bullseye Design," have been registered with the U.S. Patent and Trademark Office. We also seek to obtain and preserve intellectual property protection for our private-label brands.

Geographic Information

Substantially, all of our revenues are generated and long-lived assets are located within the United States.

Available Information

Our Annual Report on Form 10-K, quarterly reports on Form 10-Q, current reports on
Form 8-K and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act are available free of charge at www.Target.com (click on
"Investors" and "SEC Filings") as soon as reasonably practicable after we file such material with, or furnish it to, the Securities and Exchange Commission (SEC). Our Corporate Governance Guidelines,
Business Conduct Guide, Corporate Responsibility Report and the position descriptions for our Board of Directors and Board committees are also available free of charge in print upon request or at
www.Target.com (click on "Investors" and "Corporate Governance").

Item 1A. Risk Factors

Our
business is subject to a variety of risks. The most important of these is our ability to remain relevant to our guests with a brand they trust. Meeting our guests' expectations
requires us to manage various strategic, operational, compliance, and financial risks. Set forth below are the most significant risks that we face.

If we are unable to positively differentiate ourselves from other retailers, our results of operations could be adversely affected.

The retail business is highly competitive. In the past we have been able to compete successfully by differentiating our shopping
experience by creating an attractive value proposition through a careful combination of price, merchandise assortment, convenience, guest service and marketing efforts. Guest perceptions regarding the
cleanliness and safety of our stores, our in-stock levels and other factors also affect our ability to compete. No single competitive factor is dominant, and actions by our competitors on
any of these factors could have an adverse effect on our sales, gross margin and expenses.

If we fail to anticipate and respond quickly to changing consumer preferences, our sales, gross margin and profitability could suffer.

A substantial part of our business is dependent on our ability to make trend-right decisions in apparel, home décor,
seasonal offerings, food and other merchandise. Failure to accurately predict constantly changing consumer tastes, preferences, spending patterns and other lifestyle decisions may result in lost
sales, spoilage and increased inventory markdowns, which would lead to a deterioration in our results of operations.

Our continued success is substantially dependent on positive perceptions of Target, including our owned and exclusive brands.

We believe that one of the reasons our guests prefer to shop at Target and our team members choose Target as a place of employment is
the reputation we have built over many years of serving our four primary constituencies: guests, team members, the communities in which we operate and shareholders. To be successful in the future, we
must continue to preserve, grow and leverage the value of Target's reputation. Reputational value is based in large part on perceptions of subjective qualities, and even isolated incidents that erode
trust and confidence, particularly if they result in adverse publicity, governmental investigations or litigation, can have an adverse impact on these perceptions and lead to tangible adverse affects
on our business, including consumer boycotts, loss of new store development opportunities, or team member recruiting difficulties.

In
addition, we sell many products under our owned and exclusive brands, such as Market Pantry, up & up, Target Home, Merona and Mossimo. These brands generally carry higher
margins than national brand products, and represent a growing portion of our overall sales, totaling approximately one-third of sales in 2010. If one or more of these brands experiences a
loss of consumer acceptance or confidence, our sales and gross margin rate could be adversely affected.

We are highly susceptible to the state of macroeconomic conditions and consumer confidence in the United States.

All of our stores are located within the United States, making our results highly dependent on U.S. consumer confidence and the health
of the U.S. economy. In addition, a significant portion of our total sales is derived from stores located in five states: California, Texas, Florida, Minnesota and Illinois, resulting in further
dependence on local economic conditions in these states. Deterioration in macroeconomic conditions and consumer confidence could negatively affect our business in many ways, including slowing sales
growth or reduction in overall sales, and reducing gross margins.

In
addition to the impact of macroeconomic conditions on our retail sales, these same considerations impact the success of our Credit Card Segment. Deterioration in macroeconomic
conditions can adversely affect cardholders' ability to pay their balances, and we may not be able to fully anticipate and respond to changes in the risk profile of our cardholders when extending
credit, resulting in higher bad debt expense. Demand for consumer credit is also impacted by consumer choices regarding payment methods, and our performance could be adversely affected by consumer
decisions to use debit cards or other forms of payment.

If we do not effectively manage our large and growing workforce, our results of operations could be adversely affected.

With approximately 355,000 team members, our workforce costs represent our largest operating expense, and our business is dependent on
our ability to attract, train and retain a growing number of qualified team members. Many of those team members are in entry-level or part-time positions with historically high turnover
rates. Our ability to meet our labor needs while controlling our costs is subject to external factors such as unemployment levels, prevailing wage rates, health care and other benefit costs and
changing demographics. If we are unable to attract and retain adequate numbers of qualified team members, our operations, guest service levels and support functions could suffer. Those factors,
together with increasing wage and benefit costs, could adversely affect our results of operations.

Lack of availability of suitable locations in which to build new stores could slow our growth, and difficulty in executing plans for new stores, expansions and remodels
could increase our costs and capital requirements.

Our future growth is dependent, in part, on our ability to build new stores and expand and remodel existing stores in a manner that
achieves appropriate returns on our capital investment. We compete with other retailers and businesses for suitable locations for our stores. In addition, for many sites we are dependent on a third
party developer's ability to acquire land, obtain financing and secure the necessary zoning changes and permits for a larger project, of which our store may be one component. Turmoil in the financial
markets may make it difficult for third party developers to obtain financing for new projects. Local land use and other regulations applicable to the types of stores we desire to construct may affect
our ability to find suitable locations and also influence the cost of constructing, expanding and remodeling our stores. A significant portion of our expected new store sites are located in fully
developed markets, which is generally a more time-consuming and expensive undertaking than expansion into undeveloped suburban and ex-urban markets.

We are dependent on our vendors to supply merchandise in a timely and efficient manner. If a vendor fails to deliver on its
commitments, whether due to financial difficulties or other reasons, we could experience merchandise out-of-stocks that could lead to lost sales. In addition, a large portion
of our merchandise is sourced, directly or indirectly, from outside the United States, with China as our single largest source. Political or financial instability, trade restrictions, increased
tariffs, currency exchange rates, the outbreak of pandemics, labor unrest, transport capacity and costs, port security or other events that could slow port activities and affect foreign trade are
beyond our control and could disrupt our supply of merchandise and/or adversely affect our results of operations.

If our merchandise offerings, including food, drug and children's products, do not meet applicable safety standards or our guests'
expectations regarding safety, we could experience lost sales, experience increased costs and be exposed to legal and reputational risk. All of our vendors must comply with applicable product safety
laws, and we are dependent on them to ensure that the products we buy comply with all safety standards. Events that give rise to actual, potential or perceived product safety concerns, including food
or drug contamination, could expose us to government enforcement action or private litigation and result in costly product recalls and other liabilities. In addition, negative guest perceptions
regarding the safety of the products we sell could cause our guests to seek alternative sources for their needs, resulting in lost sales. In those circumstances, it may be difficult and costly for us
to regain the confidence of our guests.

If we fail to protect the security of personal information about our guests, we could be subject to costly government enforcement actions or private litigation and our
reputation could suffer.

The nature of our business involves the receipt and storage of personal information about our guests. If we experience a data security
breach, we could be exposed to government enforcement actions and private litigation. In addition, our guests could lose confidence in our ability to protect their personal information, which could
cause them to discontinue usage of our credit card products, decline to use our pharmacy services, or stop shopping at our stores altogether. Such events could lead to lost future sales and adversely
affect our results of operations.

Our failure to comply with federal, state or local laws, or changes in these laws could increase our expenses.

Our business is subject to a wide array of laws and regulations. Significant legislative changes that affect our relationship with our
workforce could increase our expenses and adversely affect our operations. Examples of possible legislative changes affecting our relationship with our workforce include changes to an employer's
obligation to recognize collective bargaining units, the process by which collective bargaining agreements are negotiated or imposed, minimum wage requirements, and health care mandates. In addition,
changes in the regulatory environment regarding topics such as banking and consumer credit, Medicare reimbursements, privacy and information security, product safety or environmental protection, among
others, could cause our expenses to increase without an ability to pass through any increased expenses through higher prices. In addition, if we fail to comply with applicable laws and regulations,
particularly wage and hour laws, we could be subject to legal risk, including government enforcement action and class action civil litigation, which could adversely affect our results of operations.

Given the geographic concentration of our stores, natural disasters could adversely affect our results of operations.

Our three largest states, by total sales, are California, Texas and Florida, areas where hurricanes and earthquakes are prevalent. Such
events could result in significant physical damage to or closure of one or more of our stores or distribution centers, and cause delays in the distribution of merchandise from our vendors to our
distribution centers and stores, which could adversely affect our results of operations.

Changes in our effective income tax rate could affect our results of operations.

Our effective income tax rate is influenced by a number of factors. Changes in the tax laws, the interpretation of existing laws, or
our failure to sustain our reporting positions on examination could adversely affect our effective tax rate. In addition, our effective income tax rate generally bears an inverse relationship to
capital market returns due to the tax-free nature of investment vehicles used to economically hedge our deferred compensation liabilities.

If we are unable to access the capital markets or obtain bank credit, our growth plans, liquidity and results of operations could suffer.

We are dependent on a stable, liquid and well-functioning financial system to fund our operations and growth plans. In
particular, we have historically relied on the public debt markets to raise capital for new store development and other capital expenditures, the commercial paper market and bank credit facilities to
fund seasonal needs for working capital, and the asset-backed securities markets to partially fund our accounts receivable portfolio. In addition, we use a variety of derivative products to manage our
exposure to market risk, principally interest rate and equity price fluctuations. Disruptions or turmoil in the financial markets could adversely affect our ability to meet our capital requirements,
fund our working capital needs or lead to losses on derivative positions resulting from counterparty failures.

We rely extensively on our computer systems to manage inventory, process guest transactions and summarize results. Our systems are
subject to damage or interruption from power outages, telecommunications failures, computer viruses, security breaches and catastrophic events. If our systems are damaged or fail to function properly,
we may incur substantial costs to repair or replace them, and may experience loss of critical data and interruptions or delays in our ability to manage inventories or process guest transactions, which
could adversely affect our results of operations.

In
2011 we expect to migrate our online presence (Target.com) from a platform currently operated by Amazon, Inc. to our own proprietary platform. If this new platform does not function
as designed, we may experience a loss of guest confidence, data security breaches, lost sales or be exposed to fraudulent purchases.

Our plan to enter the Canadian retail market is our first expansion of retail operations outside of the United States. Our ability to
convert the leased locations that we acquire from Zellers Inc. to Target stores depends in large measure upon our ability to negotiate acceptable modifications to existing lease terms, remodel
existing assets and recruit, hire and retain qualified team members. In addition, access to local suppliers of certain types of goods may limit our ability to offer a full assortment of merchandise in
certain markets. The effective execution of our strategy is also contingent on our ability to
design new marketing and promotional programs that positively differentiate us from other retailers in Canada. If we do not effectively execute our expansion plans for Canada, our financial
performance could be adversely affected.

At January 29, 2011, we had 1,750 stores in 49 states and the District of Columbia:

Number of Stores

Retail Sq. Ft.
(in thousands)

Number of Stores

Retail Sq. Ft.
(in thousands)

Alabama

20

2,867

Montana

7

780

Alaska

3

504

Nebraska

14

2,006

Arizona

48

6,363

Nevada

19

2,461

Arkansas

9

1,165

New Hampshire

9

1,148

California

248

32,818

New Jersey

43

5,671

Colorado

42

6,275

New Mexico

9

1,024

Connecticut

20

2,672

New York

66

9,000

Delaware

3

413

North Carolina

47

6,168

District of Columbia

1

179

North Dakota

4

554

Florida

125

17,552

Ohio

63

7,868

Georgia

55

7,517

Oklahoma

14

2,022

Hawaii

3

541

Oregon

19

2,318

Idaho

6

664

Pennsylvania

60

7,822

Illinois

87

11,895

Rhode Island

4

517

Indiana

33

4,377

South Carolina

18

2,224

Iowa

22

3,015

South Dakota

5

580

Kansas

19

2,577

Tennessee

32

4,096

Kentucky

13

1,525

Texas

148

20,838

Louisiana

15

2,108

Utah

12

1,818

Maine

5

630

Vermont





Maryland

36

4,663

Virginia

56

7,454

Massachusetts

34

4,437

Washington

35

4,098

Michigan

59

7,036

West Virginia

6

755

Minnesota

73

10,456

Wisconsin

37

4,482

Mississippi

6

743

Wyoming

2

187

Missouri

36

4,735

Total

1,750

233,618

The following table summarizes the number of owned or leased stores and distribution centers at January 29, 2011:

Stores

Distribution
Centers (b)

Owned

1,500

29

Leased

84

8

Combined (a)

166



Total

1,750

37

(a)

Properties within the "combined" category are primarily owned buildings on leased land.

(b)

The 37 distribution
centers have a total of 48,022 thousand square feet.

We own our corporate headquarters buildings located in Minneapolis, Minnesota, and we lease and own additional office space in the United States.
Our international sourcing operations have 27 office locations in 18 countries, all of which are leased. We also lease office space in Bangalore, India, where we operate various support functions. Our
properties are in good condition, well maintained and suitable to carry on our business.

For
additional information on our properties, see also the Capital Expenditures section in Item 7, Management's Discussion and Analysis of Financial Condition and Results of
Operations and Notes 13 and 21 of the Notes to Consolidated Financial Statements included in Item 8, Financial Statements and Supplementary Data.

The following governmental enforcement proceedings relating to environmental matters are reported pursuant to
instruction 5(C) of Item 103 of Regulation S-K because they involve potential monetary sanctions in excess of $100,000:

We
were a defendant in a civil lawsuit filed by the California Attorney General and a number of California District Attorneys in June 2009 alleging that we did not handle and dispose of
certain unsold products as hazardous waste and that we violated California's hazardous waste laws. A settlement was reached in this case on January 27, 2011, which obligates Target to pay
$22.5 million and consent to an injunction regarding future compliance with all California hazardous waste laws. The settlement was approved by the Alameda County Superior Court and judgment
was entered on March 2, 2011.

We
are the subject of an ongoing Environmental Protection Agency (EPA) investigation for alleged violations of the Clean Air Act (CAA). In March 2009, the EPA issued a Finding of
Violation (FOV) related to alleged violations of the CAA, specifically the National Emission Standards for Hazardous Air Pollutants (NESHAP) promulgated by the EPA for asbestos. The FOV pertains to
the remodeling of 36 Target stores that occurred between January 1, 2003 and October 28, 2007. The EPA FOV process is ongoing and no specific relief has been sought to date by the EPA.

The
American Jobs Creation Act of 2004 requires SEC registrants to disclose if they have been required to pay certain penalties for failing to disclose to the Internal Revenue Service
their participation in listed transactions. We have not been required to pay any of the penalties set forth in Section 6707A(e)(2) of the Internal Revenue Code.

Item 4. Reserved

Item 4A. Executive Officers

The executive officers of Target as of March 7, 2011 and their positions and ages are as follows:

Each
officer is elected by and serves at the pleasure of the Board of Directors. There is neither a family relationship between any of the officers named and any other executive officer
or member of the Board of Directors nor any arrangement or understanding pursuant to which any person was selected as an officer. The service period of each officer in the positions listed and other
business experience for the past five years is listed below.

Timothy R. Baer

Executive Vice President, General Counsel and Corporate Secretary since March 2007. Senior Vice President, General Counsel and Corporate Secretary from June 2004 to March 2007.

Executive Vice President and Chief Marketing Officer since August 2008. Executive Vice President, Marketing from January 2003 to August 2008.

John D. Griffith

Executive Vice President, Property Development since February 2005.

Beth M. Jacob

Executive Vice President and Chief Information Officer since January 2010. Senior Vice President and Chief Information Officer from July 2008 to January 2010. Vice President, Guest Operations, Target Financial
Services from August 2006 to July 2008. Vice President, Guest Contact Centers, Target Financial Services from September 2003 to August 2006.

Jodeen A. Kozlak

Executive Vice President, Human Resources since March 2007. Senior Vice President, Human Resources from February 2006 to March 2007. Vice President, Human Resources and Employee Relations General Counsel from November
2005 to February 2006.

Tina M. Schiel

Executive Vice President, Stores since January 2011. Senior Vice President, New Business Development from February 2010 to January 2011. Senior Vice President, Stores from February 2001 to February 2010.

Douglas A. Scovanner

Executive Vice President and Chief Financial Officer since February 2000.

Terrence J. Scully

President, Financial and Retail Services since March 2003.

Gregg W. Steinhafel

Chief Executive Officer since May 2008. President since August 1999. Director since January 2007. Chairman of the Board since February 2009.

Kathryn A. Tesija

Executive Vice President, Merchandising since May 2008. Senior Vice President, Merchandising from July 2001 to May 2008.

Laysha L. Ward

President, Community Relations and Target Foundation since July 2008. Vice President, Community Relations from February 2003 to July 2008.

Our common stock is listed on the New York Stock Exchange under the symbol "TGT." We are authorized to issue up to
6,000,000,000 shares of common stock, par value $0.0833, and up to 5,000,000 shares of preferred stock, par value $0.01. At March 7, 2011, there were 17,247 shareholders of record. Dividends
declared per share and the high and low closing common stock price for each fiscal quarter during 2010 and 2009 are disclosed in Note 29 of the Notes to Consolidated Financial Statements,
included in Item 8, Financial Statements and Supplementary Data.

In
November 2007, our Board of Directors authorized the repurchase of $10 billion of our common stock. Since the inception of this share repurchase program, we have repurchased
151.4 million common shares for a total cash investment of $7,827 million ($51.70 per share).

The
table below presents information with respect to Target common stock purchases made during the three months ended January 29, 2011, by Target or any "affiliated purchaser" of
Target, as defined in Rule 10b-18(a)(3) under the Exchange Act.

Approximate

Total Number of

Dollar Value of

Shares Purchased

Shares that May

Total Number

Average

as Part of

Yet Be Purchased

of Shares

Price Paid

Publicly Announced

Under the

Period

Purchased (a)

per Share (a)

Program (a)

Program

October 31, 2010 through
November 27, 2010

1,632,664

$

52.05

145,434,588

$

2,501,898,442

November 28, 2010 through
January 1, 2011

97,151

(b)

54.12

145,518,341

2,497,365,556

January 2, 2011 through
January 29, 2011

5,872,428

55.31

151,390,769

2,172,553,879

7,602,243

54.60

151,390,769

2,172,553,879

(a)

The table above includes shares reacquired upon settlement of prepaid forward contracts. For the three months ended January 29, 2011, 0.3 million shares were reacquired
through these contracts. At January 29, 2011, we held asset positions in prepaid forward contracts for 1.2 million shares of our common stock, for a total cash investment of
$51 million, or an average per share price of $44.09. Refer to Notes 24 and 26 of the Notes to Consolidated Financial Statements for further details of these contracts.

(b)

The number of shares above includes shares of common stock reacquired from team members who wish to tender owned shares to satisfy the tax withholding on equity awards as part of our
long-term incentive plans or to satisfy the exercise price on stock option exercises. For the three months ended January 29, 2011, 13,398 shares were reacquired at an average per
share price of $59.72 pursuant to our long-term incentive plan.

The graph above compares the cumulative total shareholder return on our common stock for the last five fiscal years with the cumulative total
return on the S&P 500 Index and a peer group consisting of the companies comprising the S&P 500 Retailing Index and the S&P 500 Food and Staples Retailing Index (Peer Group) over
the same period. The Peer Group index consists of 40 general merchandise, food and drug retailers and is weighted by the market capitalization of each component company. The graph assumes the
investment of $100 in Target common stock, the S&P 500 Index and the Peer Group on January 28, 2006, and reinvestment of all dividends.

Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations

Executive Summary

Our 2010 Retail Segment sales increased 3.7 percent over last year due to a 2.1 percent comparable-store increase
combined with the contribution from new stores. Our Retail Segment EBITDA and EBIT increased 4.9 percent and 5.8 percent, respectively, compared with the prior year. In the Credit Card
Segment, we achieved a significant increase in segment profit primarily due to declining bad debt expense driven by improved trends in key measures of risk.

Cash
flow provided by operations was $5,271 million, $5,881 million and $4,430 million for 2010, 2009 and 2008, respectively. We opened 13 new stores and 76 new
stores in 2010 and 2009, respectively. In 2010 we remodeled 341 stores, significantly more than the 67 stores we remodeled in 2009. Additionally, during 2010 and 2009 we repurchased
47.8 million and 9.9 million shares of our common stock for a total cash investment of $2,508 million ($52.44 per share) and $479 million ($48.54 per share), respectively.

In
January 2011, we entered into an agreement to purchase the leasehold interests in up to 220 sites in Canada currently operated by Zellers Inc., in exchange for
C$1,825 million (Canadian dollars), due in two payments, one in May 2011 and one in September 2011. We believe this transaction will allow us to open 100 to 150 Target stores in Canada,
primarily during 2013. We expect that renovation of these stores will require an investment of over C$1 billion, a portion of which may be funded by landlords. At January 29, 2011 the
value of C$1.00 approximated the value of $1.00.

Additionally,
in January 2011, we announced our plan to actively pursue the sale of our credit card receivables portfolio. As of January 29, 2011 the gross balance of our credit
card receivables portfolio was $6,843 million, of which $3,954 million was funded by third parties and $2,889 million was funded by Target. Refer to Note 10 of the Notes to
Consolidated Financial Statements for further description of historical financing transactions related to our credit card receivables.

Management's
Discussion and Analysis is based on our Consolidated Financial Statements in Item 8, Financial Statements and Supplementary Data.

EBITDA is earnings before interest expense, income taxes, depreciation and amortization.

EBIT is earnings before interest expense and income taxes.

(a)

Loyalty Program discounts are recorded as reductions to sales in our Retail Segment. Effective with the October 2010 nationwide launch of our new 5% REDcard
Rewards loyalty program, we changed the formula under which our Credit Card segment reimburses our Retail Segment to better align with the attributes of the new program. These reimbursed amounts were
$102 million in 2010, $89 million in 2009 and $117 million in 2008. In all periods these amounts were recorded as reductions to SG&A expenses within the Retail Segment and
increases to operations and marketing expenses within the Credit Card Segment.

Sales include merchandise sales, net of expected returns, from our stores and our online business, as well as gift card breakage. Refer
to Note 2 of the Notes to Consolidated Financial Statements for a definition of gift card breakage. Total sales for the Retail Segment for 2010 were $65,786 million, compared with
$63,435 million in 2009 and $62,884 million in 2008. All periods were 52-week years. Growth in total sales between 2010 and 2009 resulted from higher comparable-store sales
and additional stores opened, whereas between 2009 and 2008, growth in total sales resulted from sales from additional stores opened, partially offset by lower comparable-store sales. In 2010,
deflation affected sales growth by approximately 0.2 percentage points, compared with a deflationary impact of approximately 3.6 percentage points in 2009 and an inflationary impact of
2.2 percentage points in 2008.

Percentage of Sales

Sales by Product Category

2010

2009

2008

Household essentials

24

%

23

%

22

%

Hardlines

20

22

22

Apparel and accessories

20

20

20

Home furnishings and décor

19

19

21

Food and pet supplies

17

16

15

Total

100

%

100

%

100

%

Refer to the Merchandise section in Item 1, Business, for a description of our product categories.

Comparable-store
sales is a measure that indicates the performance of our existing stores by measuring the growth in sales for such stores for a period over the comparable,
prior-year period of equivalent length. The method of calculating comparable-store sales varies across the retail industry. As a result, our comparable-store sales calculation is not
necessarily comparable to similarly titled measures reported by other companies.

Comparable-store
sales are sales from our online business and stores open longer than one year, including:



sales from stores that have been remodeled or expanded while remaining open



sales from stores that have been relocated to new
buildings of the same format within the same trade area, in which the
new store opens at about the same time as the old store closes

Comparable-store
sales do not include:



sales from general merchandise stores that have been converted, or relocated within the same trade area, to a SuperTarget
store format



sales from stores that were intentionally closed to be remodeled, expanded or reconstructed

Comparable-Store Sales

2010

2009

2008

Comparable-store sales change

2.1

%

(2.5)%

(2.9)

%

Drivers of changes in comparable-store sales:

Number of transactions

2.0

%

(0.2)%

(3.1)

%

Average transaction amount

0.1

%

(2.3)%

0.2

%

Units per transaction

2.5

%

(1.5)%

(2.1)

%

Selling price per unit

(2.3)

%

(0.8)%

2.3

%

The comparable-store sales increases or decreases above are calculated by comparing sales in fiscal year periods with
comparable prior fiscal year periods of equivalent length.

In
2010, the change in comparable-store sales was driven by an increase in the number of transactions and a slight increase in the average transaction amount, reflecting an increase in
units per transaction largely offset by a decrease in selling price per unit. In 2009, the change in comparable-store sales was driven by a decline in the average transaction amount, primarily due to
a decrease in the number of units per transaction, as well as a slight decrease in the number of transactions. The collective interaction of a broad array of macroeconomic, competitive and consumer
behavioral factors, as well as sales mix, and transfer of sales to new stores makes further analysis of sales metrics infeasible.

Beginning
April 2010, all new qualified credit card applicants receive the Target Card, and we no longer issue the Target Visa to credit card applicants. Existing Target Visa cardholders
are not affected. Beginning October 2010, guests receive a 5 percent discount on virtually all purchases at checkout every day when they use a REDcard at any Target store or on Target.com.

We
monitor the percentage of store sales that are paid for using REDcards (REDcard Penetration), because our internal analysis has indicated that a meaningful portion of the incremental
purchases on our REDcards are also incremental sales for Target, with the remainder of the incremental purchases on the REDcards representing a shift in tender type.

REDcard Penetration

2010

2009

2008

Target credit penetration

5.2

%

5.2

%

6.2

%

Target debit penetration

0.7

%

0.4

%

0.3

%

Total store REDcard penetration

5.9

%

5.6

%

6.5

%

Since launching our new 5% REDcard Rewards program in October 2010, we have experienced an increase in REDcard penetration. REDcard penetration
for the fourth quarter of 2010 was 7.4 percent compared to 5.6 percent in the fourth quarter of 2009.

Gross Margin Rate

Gross margin rate represents gross margin (sales less cost of sales) as a percentage of sales. See Note 3 of the Notes to
Consolidated Financial Statements for a description of costs included in cost of sales. Markup is the

difference
between an item's cost and its retail price (expressed as a percentage of its retail price). Factors that affect markup include vendor offerings and negotiations, vendor income, sourcing
strategies, market forces like raw material and freight costs, and competitive influences. Markdowns are the reduction in the original or previous price of retail merchandise. Factors that affect
markdowns include inventory management, competitive influences and economic conditions.

Our
gross margin rate was 30.5 percent in 2010, unchanged from prior year, as margin rates within categories were generally stable and the impact of sales mix was essentially
neutral. There were no other significant variances in the drivers of gross margin rate.

Our
gross margin rate was 30.5 percent in 2009, compared with 29.8 percent in 2008. Our 2009 gross margin rate benefitted from rate improvements within categories,
partially offset by the mix impact of faster sales growth in lower margin rate categories (generally product categories of household essentials and food). The impact of rate performance within
merchandise categories on gross margin rate was an approximate 1.1 percentage point increase for 2009. This increase is the result of improved markups and reduced markdowns. The impact of sales
mix on gross margin rate was an approximate 0.4 percentage point reduction.

Selling, General and Administrative Expense Rate

Our selling, general and administrative (SG&A) expense rate represents SG&A expenses as a percentage of sales. See Note 3 of the
Notes to Consolidated Financial Statements for a description of costs included in SG&A expenses. SG&A expenses exclude depreciation and amortization, as well as expenses associated with our credit
card operations, which are reflected separately in our Consolidated Statements of Operations.

SG&A
expense rate was 20.3 percent in 2010 compared with 20.5 percent in 2009 and 20.4 percent in 2008. The change in the rate in 2010 was primarily due to favorable
leverage of overall compensation expenses. The change in the SG&A expense rate in 2009 was primarily driven by an approximate 0.4 percentage point impact from an increase in incentive
compensation due to better than expected 2009 performance compared with 2008 results, which was partially offset by an approximate 0.2 percentage point impact from sustained productivity gains
in our stores.

Depreciation and Amortization Expense Rate

Our depreciation and amortization expense rate represents depreciation and amortization expense as a percentage of sales. In 2010, our
depreciation and amortization expense rate was 3.1 percent compared with 3.2 percent in 2009 and 2.9 percent in 2008. The rate was essentially unchanged from the same period last
year. In 2009 the increase in the rate was primarily due to accelerated depreciation on assets that were replaced as part of our remodel program.

Store Data

Number of Stores

General
merchandise

Expanded food
assortment

SuperTarget

Total

January 30, 2010

1,381

108

251

1,740

Opened



13



13

Format conversion

(341

)

341





Closed (a)

(3

)





(3

)

January 29, 2011

1,037

462

251

1,750

Retail Square Feet (b)
(thousands)

January 30, 2010

172,735

14,714

44,503

231,952

Opened



1,958



1,958

Format conversion

(45,138

)

45,151



13

Closed (a)

(305

)





(305

)

January 29, 2011

127,292

61,823

44,503

233,618

(a)

Includes 1 store relocation in the same trade area and 2 stores closed without replacement.

We offer credit to qualified guests through the Target Visa and the Target Card. Our credit card program supports our core retail
operations and remains an important contributor to our overall profitability and engagement with our guests. Beginning April 2010, all new qualified credit card applicants receive the Target Card, and
we no longer issue the Target Visa to credit card applicants. Existing Target Visa cardholders are not affected. Beginning October 2010, guests receive a 5 percent discount on virtually all
purchases at checkout every day when they use a REDcard at any Target store or on Target.com.
This new REDcard Rewards program replaced the existing rewards program in which account holders received an initial 10 percent-off coupon for opening the account and earned points
toward a 10 percent-off coupon on subsequent purchases. These changes are intended to simplify the program and to generate profitable incremental retail sales.

Credit
card revenues are comprised of finance charges, late fees and other revenue, and third party merchant fees, or the amounts received from merchants who accept the Target Visa
credit card.

Loyalty Program discounts are recorded as reductions to sales in our Retail Segment. Effective with the October 2010 nationwide launch of our new 5% REDcard Rewards loyalty program,
we changed the formula under which our Credit Card segment reimburses our Retail Segment to better align with the attributes of the new program. These reimbursed amounts were $102 million in
2010, $89 million in 2009 and $117 million in 2008. In all periods these amounts were recorded as reductions to SG&A expenses within the Retail Segment and increases to operations and
marketing expenses within the Credit Card Segment.

(b)

Amounts represent the portion of average gross credit card receivables funded by Target. For 2010, 2009 and 2008, these
amounts exclude $4,335 million, $5,484 million
and $4,503 million, respectively, of receivables funded by nonrecourse debt collateralized by credit card receivables.

(c)

ROIC is return on invested capital, and this rate
equals our segment profit divided by average gross credit card receivables funded by Target, expressed as an annualized rate.

Spread to LIBOR is a metric used to analyze the performance of our total credit
card portfolio because the majority of our portfolio earned finance charge revenue at rates tied to the
Prime Rate, and the interest rate on all nonrecourse debt securitized by credit card receivables is tied to LIBOR.

(c)

As a percentage of average gross credit card receivables.

Our primary measure of segment profit in our Credit Card Segment is the EBIT generated by our total credit card receivables portfolio less the
interest expense on nonrecourse debt collateralized by credit card receivables. We analyze this measure of profit in light of the amount of capital we have invested in our credit card receivables. In
addition, we measure the performance of our overall credit card receivables portfolio by calculating the dollar Spread to LIBOR at the portfolio level. This metric approximates overall financial
performance of the entire credit card portfolio we manage by measuring the difference between EBIT earned on the portfolio and a hypothetical benchmark rate financing cost applied to the entire
portfolio. The interest rate on all nonrecourse debt securitized by credit card receivables is tied to LIBOR.

Effective
April 2009, we implemented a terms change to our portfolio that established a minimum annual percentage rate (APR) applied to cardholder account balances. Under these terms,
finance charges accrue at a fixed APR if the benchmark Prime Rate is less than 6%; if the Prime Rate is greater than 6%, finance charges accrue at the benchmark Prime Rate, plus a spread. Because the
Prime Rate was less than 6% during 2009, the majority of our portfolio accrued finance charges at a fixed APR subsequent to this terms change. As a result of regulatory actions that impact our
portfolio, effective January 2010, we implemented a second terms change that converted the minimum APR for the majority of our accounts to a variable rate, and
we eliminated penalty pricing for all current, or nondelinquent accounts. Penalty pricing is the charging of a higher interest rate for a period of time, generally 12 months, and is triggered
when a cardholder repeatedly fails to make timely payments. Additionally, beginning in August 2010 late fee limitations went into effect that resulted in reduced late fee revenue.

In
2010, Credit Card Segment profit increased to $541 million from $201 million, driven mostly by favorability in bad debt expense. The reduction in our investment in the
portfolio combined with these results produced a strong improvement in segment ROIC. Segment revenues were $1,604 million, a decrease of $318 million, or 16.5 percent, from the
prior year, which was primarily driven by lower average receivables as well as reduced late fees. Segment expenses were $980 million, a decrease of $644 million, or 39.7 percent,
from prior year driven primarily by lower bad debt expense due to lower actual and expected write-offs. Segment interest expense on nonrecourse debt declined due to a decrease in
nonrecourse debt securitized by credit card receivables.

In
2009, Credit Card Segment profit increased to $201 million from $155 million as a result of improved portfolio performance (Spread to LIBOR) and significantly lower
funding costs. The reduction in our investment in the portfolio combined with these results produced a strong improvement in segment ROIC. Segment revenues were $1,922 million, a decrease of
$143 million, or 6.9 percent, from the prior year. The decrease in revenue was driven by a lower Prime Rate, lower average receivables, higher finance charge and late-fee
write-offs, and lower late fees due to fewer delinquent accounts offset by the positive impacts of the terms changes implemented in late 2008 and April 2009. Segment expenses were
$1,624 million, a decrease of $118 million, or 6.8 percent, from prior year driven by lower bad debt and operations and marketing expenses, on both a dollar and rate basis.
Segment interest expense benefited from a significantly lower LIBOR rate compared to the prior year.

Accounts with three or more payments (60+ days) past due as a percentage of period-end credit card receivables

4.2

%

6.3

%

6.1

%

Accounts with four or more payments (90+ days) past due as a percentage of period-end gross credit card receivables

3.1

%

4.7

%

4.3

%

Allowance for Doubtful Accounts

Percent Change

(millions)

2010

2009

2008

2010/2009

2009/2008

Allowance at beginning of period

$

1,016

$

1,010

$

570

0.6

%

77.1

%

Bad debt expense

528

1,185

1,251

(55.4

)

(5.3

)

Write-offs (a)

(1,007

)

(1,287

)

(912

)

(21.8

)

41.1

Recoveries (a)

153

108

101

40.2

8.3

Allowance at end of period

$

690

$

1,016

$

1,010

(32.1

)%

0.6

%

As a percentage of period-end gross credit card receivables

10.1

%

12.7

%

11.1

%

Net write-offs as a percentage of average gross credit card receivables (annualized)

12.0

%

14.1

%

9.3

%

(a)

Write-offs include the principal amount of losses (excluding accrued and unpaid finance charges), and recoveries include current period principal collections on previously
written-off balances. These amounts combined represent net write-offs.

Our 2010 period-end gross credit card receivables were $6,843 million compared to $7,982 million in 2009, a decrease of
14.3 percent. Average gross credit card receivables in 2010 decreased 14.9 percent compared with 2009 levels. In response to regulatory changes and credit card industry trends, we have
undertaken risk management and underwriting initiatives that have reduced available credit lines for higher-risk cardholders. Additionally, we have experienced an increase in payment rates
and a decrease in charges at third-parties.

Our
2009 period-end gross credit card receivables were $7,982 million compared with $9,094 million in 2008, a decrease of 12.2 percent. Average gross
credit card receivables in 2009 decreased 4.0 percent compared with 2008 levels. This change was driven by the tighter risk management and underwriting initiatives described above, fewer new
accounts being opened, and a decrease in charge activity resulting from reductions in card usage by our guests, partially offset by the impact of lower payment rates.

Other Performance Factors

Net Interest Expense

Net interest expense, which includes the interest expense on nonrecourse debt collateralized by credit card receivables detailed in the
Credit Card Segment Results above, was $757 million for 2010, decreasing 5.5 percent, or $44 million from 2009 due to lower average debt balances and a $16 million charge
related to the early retirement of long-term debt in 2009, partially offset by a higher average portfolio interest rate of 5.3 percent in 2010, compared with 4.8 percent in
2009. In 2009, net interest expense was $801 million, decreasing 7.5 percent, or $65 million from 2008. This decline was due to a lower average portfolio interest rate of
4.8 percent in 2009, compared with 5.3 percent in 2008, partially offset by a $16 million charge related to the early retirement of long-term debt.

Our effective income tax rate was 35.1 percent in 2010 and 35.7 percent in 2009. The decrease in the effective rate
between periods is primarily due to the favorable resolution of various income tax matters, which reduced income tax expense by approximately $100 million.

Our
effective income tax rate was 35.7 percent in 2009 and 37.4 percent in 2008. The decrease in the effective rate between periods is primarily due to nontaxable capital
market returns on investments used to economically hedge the market risk in deferred compensation plans in 2009, compared with nondeductible losses in 2008. The 2009 effective income tax rate is also
lower due to federal and state discrete items.

Analysis of Financial Condition

Liquidity and Capital Resources

Our period end cash and cash equivalents balance was $1,712 million compared with $2,200 million in 2009. Marketable
securities of $1,129 million and $1,617 million were included in cash and cash equivalents at the end of 2010 and 2009, respectively. Our investment policy is designed to preserve
principal and liquidity of our marketable securities. This policy allows investments in large money market funds or in highly rated direct short-term instruments that mature in
60 days or less. We also place certain limitations on the aggregate dollars invested and percentage of total fund value held when making short-term investment decisions.

Our
2010 operations were funded by both internally and externally generated funds. Cash flow provided by operations was $5,271 million in 2010 compared with $5,881 million
in 2009. This cash flow, combined with our prior year-end cash position and the debt issuance described below, allowed us to fund capital expenditures of $2,129 million and pay off
$2,259 million of debt. In addition, in 2010 we increased our share repurchases and raised dividends paid to our shareholders.

Our
2010 period-end gross credit card receivables were $6,843 million compared with $7,982 million in 2009, a decrease of 14.3 percent. Average gross
credit card receivables in 2010 decreased 14.9 percent compared with 2009 levels. This change was driven by the factors indicated in the Credit Card Segment above. This trend and the factors
influencing it are likely to continue into 2011. Due to the decrease in gross credit card receivables, Target Receivables LLC (TR LLC), formerly known as Target Receivables Corporation (TRC),
using cash flows from the receivables, repaid an affiliate of JPMorgan Chase (JPMC) $566 million and $163 million during 2010 and 2009, respectively, under the terms of our agreement
with them as described in Note 10 of the Notes to Consolidated Financial Statements. To the extent the receivables balance continues to decline, TR LLC expects to continue to pay JPMC a
prorata portion of principal collections such that the portion owned by JPMC would not exceed 47 percent.

Year-end
inventory levels increased $417 million, or 5.8 percent from 2009. Inventory levels were higher to support traffic-driving strategic initiatives, such
as our expanded food assortment in general merchandise stores and pharmacy, in addition to comparatively higher retail square footage. Accounts payable increased by $115 million, or
1.8 percent over the same period.

During
2010, we repurchased 47.8 million shares of our common stock for a total cash investment of $2,508 million ($52.44 per share) under a $10 billion share
repurchase plan authorized by our Board of Directors in November 2007. In 2009, we repurchased 9.9 million shares of our common stock for a total cash investment of $479 million ($48.54
per share).

We
paid dividends totaling $609 million in 2010 and $496 million in 2009, an increase of 22.7 percent. We declared dividends totaling $659 million ($0.92 per
share) in 2010, an increase of 31.1 percent over 2009. In 2009, we declared dividends totaling $503 million ($0.67 per share), an increase of 6.8 percent over 2008. We have paid
dividends every quarter since our first dividend was declared following our 1967 initial public offering, and it is our intent to continue to do so in the future.

Our
financing strategy is to ensure liquidity and access to capital markets, to manage our net exposure to floating interest rate volatility, and to maintain a balanced spectrum of debt
maturities. Within these parameters, we seek to minimize our borrowing costs. As described in Note 19, in July 2010, we issued $1 billion of long-term debt at 3.875% that
matures in July 2020. There were no amounts issued in 2009.

Our
ability to access the long-term debt, commercial paper and securitized debt markets has provided ample sources of liquidity to Target in the past. Our continued access to
these markets depends on multiple factors including the economic environment, our operating performance and maintaining strong debt ratings. The ratings assigned to our debt by the credit rating
agencies affect both the pricing and terms of any new financing. As of January 29, 2011 our credit ratings were as follows:

Credit Ratings

Standard and
Poor's

Moody's

Fitch

Long-term debt

A2

A+

A

Commercial paper

P-1

A-1

F1

Securitized receivables (a)

Aa2

n/a

n/a

(a)

These rated securitized receivables exclude the interest in our credit card receivables sold to JPMC.

If our credit ratings were lowered, our ability to access the debt markets and our cost of funds for new debt issuances could be adversely
impacted. Each of the credit rating agencies reviews its rating periodically and there is no guarantee our current credit rating will remain the same as described above.

As
a measure of our financial condition we monitor our interest coverage ratio, representing the ratio of pretax earnings before fixed charges to fixed charges. Fixed charges include
interest expense and the interest portion of rent expense. Our interest coverage ratio as calculated by the SEC's applicable rules was 6.1x in 2010, 5.1x in 2009 and 4.3x in 2008.

At
January 29, 2011 and January 30, 2010, there were no amounts outstanding under our commercial paper program. In past years, we funded our peak sales season working
capital needs through our commercial paper program and then used the cash generated from that sales season to repay the commercial paper issued. In 2010 and 2009 we funded our working capital needs
through internally generated funds and the long-term debt issuance indicated above.

Commercial Paper(millions)

2010

2009

Maximum daily amount outstanding during the year

$



$

112

Average amount outstanding during the year



1

Amount outstanding at year-end





Weighted average interest rate



0.2

%

An additional source of liquidity is available to us through a committed $2 billion unsecured revolving credit facility obtained through a
group of banks in April 2007, which will expire in April 2012. No balances were outstanding at any time during 2010 or 2009 under this facility.

Most
of our long-term debt obligations contain covenants related to secured debt levels. In addition to a secured debt level covenant, our credit facility also contains a
debt leverage covenant. We are,
and expect to remain, in compliance with these covenants. Additionally, at January 29, 2011, no notes or debentures contained provisions requiring acceleration of payment upon a debt rating
downgrade, except that certain outstanding notes allow the note holders to put the notes to us if within a matter of months of each other we experience both (i) a change in control; and
(ii) our long-term debt ratings are either reduced and the resulting rating is non-investment grade, or our long-term debt ratings are placed on watch for
possible reduction and those ratings are subsequently reduced and the resulting rating is non-investment grade.

We
believe our sources of liquidity will be adequate to maintain operations and to finance anticipated expansion and strategic initiatives during 2011, including our plan to enter the
Canadian retail market by paying C$1,825 million to purchase the leasehold interests in up to 220 sites currently operated by Zellers Inc. We may issue new long-term debt for these
and other initiatives, and we anticipate ample access to long-term financing. Further, in January 2011, we announced our plan to actively pursue the sale of our credit card receivables
portfolio, which may provide additional funding. As of January 29, 2011 the gross balance of our credit card receivables

portfolio
was $6,843 million, of which $3,954 million was funded by third parties and $2,889 million was funded by Target.

Capital Expenditures

Capital expenditures were $2,129 million in 2010 compared with $1,729 million in 2009 and $3,547 million in 2008.
This increase was driven by higher capital expenditures for remodels partially offset by reduced expenditures for new stores. Our 2010 capital expenditures include $482 million related to
stores that will open in 2011 and later years. Net property and equipment increased $213 million in 2010 following a decrease of $475 million in 2009.

Capital Expenditures(millions)

2010

2009

2008

New stores

$

574

$

899

$

2,341

Remodels and expansions

966

294

284

Information technology, distribution and other

589

536

922

Total

$

2,129

$

1,729

$

3,547

In connection with the previously described agreement to purchase leasehold interests in Canada, we expect that renovation of these stores will
require an investment of over C$1 billion, primarily during 2012 and 2013, a portion of which may be funded by landlords.

Required principal payments only. Excludes fair market value adjustments recorded in long-term debt, as required by derivative and hedging accounting rules. Principal
includes the 47 percent interest in credit card receivables sold to JPMC at the principal amount. In the event of a decrease in the receivables principal balance, accelerated repayment of this
obligation may occur.

(b)

Total contractual lease payments include $1,949 million of operating lease payments related to options to extend the lease term that are
reasonably assured of being exercised.
These payments also include $28 million and $241 million of legally binding minimum lease payments for stores opening in 2011 or later for capital and operating leases, respectively.
Capital lease obligations include interest.

(c)

Real estate liabilities include costs incurred but not paid related to the construction or remodeling of real estate and
facilities.

(d)

Deferred compensation obligations include commitments related to our nonqualified deferred compensation plans. The timing of deferred compensation payouts is
estimated based on
payments currently made to former employees and retirees, forecasted investment returns, and the projected timing of future retirements.

(e)

Estimated tax contingencies of
$397 million, including interest and penalties, are not included in the table above because we are not able to make reasonably reliable estimates
of the period of cash settlement.

(f)

These payments vary with LIBOR and are calculated assuming LIBOR of 0.25 percent plus a spread, for each year outstanding.

(g)

Real estate obligations include commitments for the purchase, construction or remodeling of real estate and facilities.

(h)

Purchase obligations include all legally binding contracts such as firm minimum commitments for inventory purchases, merchandise royalties, equipment purchases, marketing related
contracts, software acquisition/license commitments and service contracts. We issue inventory purchase orders in the normal course of business, which represent authorizations to purchase that are
cancelable by their terms. We do not consider purchase orders to be firm inventory commitments; therefore, they are excluded from the table above. If we choose to cancel a purchase order, we may be
obligated to reimburse the vendor for unrecoverable outlays incurred prior to cancellation. We also issue trade letters of credit in the ordinary course of business, which are excluded from this table
as these obligations are conditioned on terms of the letter of credit being met.

(i)

In January 2011, we entered into an agreement to purchase the leasehold interests in up to
220 sites in Canada currently operated by Zellers Inc., in exchange for
C$1,825 million. At January 29, 2011 the value of C$1.00 approximated the value of $1.00. This commitment does not include future minimum lease payments on sites that may be selected in
2011.

(j)

We have not included obligations under our pension and postretirement health care benefit plans in the contractual obligations table above because no additional
amounts are required
to be funded as of January 29, 2011. Our historical practice regarding these plans has been to contribute amounts necessary to satisfy minimum pension funding requirements, plus periodic
discretionary amounts determined to be appropriate.

Off Balance Sheet Arrangements We do not have any arrangements or relationships with entities that are not consolidated into the financial statements or financial
guarantees that are reasonably likely to materially affect our liquidity or the availability of capital resources.

Critical Accounting Estimates

Our analysis of operations and financial condition is based on our consolidated financial statements, prepared in accordance with U.S.
generally accepted accounting principles (GAAP). Preparation of these consolidated financial statements requires us to make estimates and assumptions
affecting the reported amounts of assets and liabilities at the date of the consolidated financial statements, reported amounts of revenues and expenses during the reporting period and related
disclosures of contingent assets and liabilities. In the Notes to Consolidated Financial Statements, we describe the significant accounting policies used in preparing the consolidated financial
statements. Our estimates are evaluated on an ongoing basis and are drawn from historical experience and other assumptions that we believe to be reasonable under the circumstances. Actual results
could differ under other assumptions or conditions. However, we do not believe there is a reasonable likelihood that there will be a material change in future estimates or assumptions. Our senior
management has discussed the development and selection of our critical accounting estimates with the Audit Committee of our Board of Directors. The following items in our consolidated financial
statements require significant estimation or judgment:

Inventory and cost of sales We use the retail inventory method to account for substantially our entire inventory and the related cost of sales. Under this method,
inventory is stated at cost using the last-in, first-out (LIFO) method as determined by applying a cost-to-retail ratio to each merchandise grouping's
ending retail value. Cost includes the purchase price as adjusted for vendor income. Since inventory value is adjusted regularly to reflect market conditions, our inventory methodology reflects the
lower of cost or market. We reduce inventory for estimated losses related to shrink and markdowns. Our shrink estimate is based on historical losses verified by ongoing physical inventory counts.
Historically, our actual physical inventory count results have shown our estimates to be reliable. Markdowns designated for clearance activity are recorded when the salability of the merchandise has
diminished. Inventory is at risk of obsolescence if economic conditions change. Relevant economic conditions include changing consumer demand, customer preferences, changing consumer credit markets or
increasing competition. We believe these risks are largely mitigated because our inventory typically turns in less than three months. Inventory was $7,596 million and $7,179 million at
January 29, 2011 and January 30, 2010, respectively, and is further described in Note 11 of the Notes to Consolidated Financial Statements.

Vendor income receivable Cost of sales and SG&A expenses are partially offset by various forms of consideration received from our vendors. This "vendor income" is
earned for a variety of vendor-sponsored programs, such as volume rebates, markdown allowances, promotions and advertising allowances, as well as for our compliance programs. We establish a receivable
for the vendor income that is earned but not yet received. Based on the agreements in place, this receivable is computed by estimating when we have completed our performance and when the amount is
earned. The majority of all year-end vendor income receivables are collected within the following fiscal quarter, and we do not believe there is a reasonable likelihood that the
assumptions used in our estimate will change significantly. Historically, adjustments to our vendor income receivable have not been material. Vendor income receivable was $517 million and
$390 million at January 29, 2011 and January 30, 2010, respectively, and is described further in Note 4 of the Notes to Consolidated Financial Statements.

Allowance for doubtful accounts When receivables are recorded, we recognize an allowance for doubtful accounts in an amount equal to anticipated future
write-offs. This allowance includes provisions for uncollectible finance charges and other credit-related fees. We estimate future write-offs based on historical experience of
delinquencies, risk scores, aging trends and industry risk trends. Substantially all accounts continue to accrue finance charges until they are written off. Accounts are automatically written off when
they become 180 days past due. Management believes the allowance for doubtful accounts is adequate to cover anticipated losses in our credit card accounts receivable under current conditions;
however, unexpected, significant deterioration in any of the

factors
mentioned above or in general economic conditions could materially change these expectations. During 2010, we continued risk management and underwriting initiatives that reduced available
credit lines for higher-risk cardholders. In addition, we experienced an increase in payment rates and a decrease in charge activity from reductions in card usage by our guests. As a
result of these trends, our allowance for doubtful accounts related to our credit card receivables decreased $326 million, from $1,016 million, or 12.7 percent of gross credit
card receivables, at January 30, 2010 to $690 million, or 10.1 percent of gross credit card receivables, at January 29, 2011. Credit card receivables and our allowance for
doubtful accounts are described in Note 10 of the Notes to Consolidated Financial Statements.

Long-lived assets Long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying
amount of an asset (or asset group) may not be recoverable. An impairment loss would be recognized when estimated undiscounted future cash flows from the operation and disposition of the asset group
are less than the carrying amount of the asset group. Asset groups have identifiable cash flows independent of other asset groups. Measurement of an impairment loss would be based on the excess of the
carrying amount of the asset group over its fair value. Fair value is measured using discounted cash flows or independent opinions of value, as appropriate. A 10 percent decrease in the fair
value of assets we intend to sell as of January 29, 2011 would result in additional impairment of approximately $12 million in 2010. Historically, we have not realized material losses
upon sale of long-lived assets.

Goodwill and intangible assets We evaluate goodwill and intangible assets for impairment annually, or whenever events or changes in circumstances indicate the
carrying value of the asset may not be recoverable. Discounted cash flow models are used in determining fair value of goodwill and intangible assets. Growth rates for sales and profits are determined
using inputs from our long-range planning process. We also make estimates of discount rates, perpetuity growth rates, and other factors. As of January 29, 2011 and
January 30, 2010, we had $223 million and $239 million of goodwill and intangible assets, respectively. While we currently believe that the fair value of our goodwill and
intangible assets exceeds its carrying value, materially different assumptions regarding future performance of our businesses or other factors could result in impairment losses.

Insurance/self-insurance We retain a substantial portion of the risk related to certain general liability, workers' compensation, property loss and
team member medical and dental claims. However, we maintain stop-loss coverage to limit the exposure related to certain risks. Liabilities associated with these losses include estimates of
both claims filed and losses incurred but not yet reported. We use actuarial methods which consider a number of factors to estimate our ultimate cost of losses. General liability and workers'
compensation liabilities are recorded at our estimate of their net present value; other liabilities referred to above are not discounted. Our workers' compensation and general liability accrual was
$628 million and $653 million at January 29, 2011 and January 30, 2010, respectively. We believe that the amounts accrued are adequate; however, our liabilities could be
significantly affected if future occurrences or loss developments differ from our assumptions. For example, a 5 percent increase or decrease in average claim costs would impact our
self-insurance expense by approximately $30 million in 2010. Historically, adjustments to our estimates have not been material. Refer to Item 7A for further disclosure of the
market risks associated with these exposures.

Income taxes We pay income taxes based on the tax statutes, regulations and case law of the various jurisdictions in which we operate. Significant judgment is
required in determining the timing and amounts of deductible and taxable items and in evaluating the ultimate resolution of tax matters in dispute with tax authorities. The benefits of uncertain tax
positions are recorded in our financial statements only after determining whether it is likely the uncertain tax positions would withstand challenge by taxing authorities. We periodically reassess
these probabilities, and record any changes in the financial statements as deemed appropriate. Liabilities for tax positions considered uncertain, including interest and penalties, were
$397 million and $579 million at January 29, 2011 and January 30, 2010, respectively. We believe the resolution of these matters will not have a material adverse impact on
our consolidated financial statements. Income taxes are described further in Note 22 of the Notes to Consolidated Financial Statements.

Pension and postretirement health care accounting We fund and maintain a qualified defined benefit pension plan. We also maintain several smaller nonqualified
plans and a postretirement health care plan for certain current and retired team members. The costs for these plans are determined based on actuarial calculations using the assumptions described in
the following paragraphs. Eligibility for, and the level of, these benefits varies depending on team members' full-time or part-time status, date of hire and/or length of
service.

Our
expected long-term rate of return on plan assets is determined by the portfolio composition, historical long-term investment performance and current market
conditions. Benefits expense recorded during the year is partially dependent upon the long-term rate of
return used. A one percentage point decrease in the expected long-term rate of return used to determine net pension and postretirement health care benefits expense would increase annual
expense by approximately $24 million.

The
discount rate used to determine benefit obligations is adjusted annually based on the interest rate for long-term high-quality corporate bonds as of the
measurement date, using yields for maturities that are in line with the duration of our pension liabilities. Therefore, these liabilities fluctuate with changes in interest rates. Historically, this
same discount rate has also been used to determine net pension and postretirement health care benefits expense for the following plan year. Benefits expense recorded during the year is partially
dependent upon the discount rates used, and a 0.5 percentage point decrease to the weighted average discount rate used to determine net pension and postretirement health care benefits expense
would increase annual expense by approximately $23 million.

Based
on our experience, we use a graduated compensation growth schedule that assumes higher compensation growth for younger, shorter-service pension-eligible team members than it does
for older, longer-service pension-eligible team members.

Pension
and postretirement health care benefits are further described in Note 27 of the Notes to Consolidated Financial Statements.

Legal contingencies We are exposed to claims and litigation arising in the ordinary course of business and use various methods to resolve these matters in a manner
that we believe serves the best interest of our shareholders and other constituents. Historically, adjustments to our estimates have not been material. We believe the recorded reserves in our
consolidated financial statements are adequate in light of the probable and estimable liabilities. We do not believe that any of the currently identified claims or litigation matters will have a
material adverse impact on our results of operations, cash flows or financial condition. However, litigation is subject to inherent uncertainties, and unfavorable rulings could occur. If an
unfavorable ruling were to occur, there may be a material adverse impact on the results of operations, cash flows or financial condition for the period in which the ruling occurs, or future periods.

New Accounting Pronouncements

Recent Adoptions

In June 2009, the FASB issued SFAS No. 166, "Accounting for Transfers of Financial Assets an amendment of FASB Statement
No. 140" (SFAS 166), codified in the Transfers and Servicing accounting principles, which amends the derecognition guidance in former FASB Statement No. 140 and eliminates the
exemption from consolidation for qualifying special-purpose entities. We adopted this guidance at the beginning of 2010 and adoption had no impact on our consolidated net earnings, cash flows or
financial position.

In
June 2009, the FASB issued SFAS No. 167, "Amendments to FASB Interpretation No. 46(R)" (SFAS 167), codified in the Consolidation accounting principles, which
amends the consolidation guidance applicable to variable interest entities. The amendments significantly affected the overall consolidation analysis under former FASB Interpretation No. 46(R).
We adopted this guidance at the beginning of 2010 and the adoption had no impact on our consolidated net earnings, cash flows or financial position.

Our outlook is based on the application of business judgment in light of current business trends, our assumptions regarding the
macroeconomic environment, and estimates of the impact of current initiatives, the most significant of which are our store remodel program, the new 5 percent REDcard Rewards program, and our
planned Canadian expansion.

In
the Retail Segment, we expect that comparable-store sales will increase in the 4 to 5 percent range in 2011. We expect that our store remodel program will contribute
incremental comparable-store sales, and net of the adverse impact of remodel disruption, this impact will grow to a run rate of about 1.5 percentage points as we progress through the year.
Separately we expect that the sales contribution of our 5% REDcard Rewards program will grow more rapidly in its importance, adding up to 2 percentage points to our same store sales growth
later in 2011. These estimates are based on extrapolations of the current performance of these programs.

In
2011 we expect to produce a full-year EBIT margin rate consistent with 2010, due to favorable leverage of SG&A and depreciation and amortization expenses offsetting the
gross margin rate declines associated with our store remodel and new rewards strategies. This offsetting impact is unlikely to
occur in the spring, particularly in the first quarter, resulting in modest pressure on EBIT margin rate in the spring, and modest favorability on this measure in the fall.

In
our Credit Card Segment, we expect receivables will continue to decline in 2011, with the pace of the decline moderating as the year progresses. We expect that the allowance for
doubtful accounts will continue to decline in 2011 as well, due to this decline in receivables and expected continued improvement in portfolio risks. We also expect measures of our rate of portfolio
profitability to remain strong in 2011. Additionally, in January 2011 we announced our plan to actively pursue the sale of our credit card receivables portfolio. As of January 29, 2011 the
gross balance of our credit card receivables portfolio was $6,843 million, of which $3,954 million was funded by third parties and $2,889 million was funded by Target.

In
January 2011, we entered into an agreement to purchase the leasehold interests in up to 220 sites in Canada currently operated by Zellers Inc., in exchange for C$1,825 million,
due in two payments, one in May 2011 and one in September 2011. We believe this transaction will allow us to open 100 to 150 Target stores in Canada, primarily during 2013. We expect that renovation
of these stores will require an investment of over C$1 billion, a portion of which may be funded by landlords. Our direct costs associated with entry into Canada may add expenses equating to an
earnings per share (EPS) equivalent in the range of $0.10 for 2011, an estimate that will continue to evolve over time. We currently believe the aggregate effect of our Canadian expansion could result
in a $0.15 to $0.20 unfavorable impact on 2011 EPS, reflecting direct incremental expenses and the indirect impact of the Canadian investment on the pace of share repurchase. We expect that the 2012
dilutive EPS impact of the Canadian expansion will exceed the 2011 dilutive EPS impact, due primarily to a full year of lease-related expenses.

We
expect 2011 capital expenditures related to our U.S. retail operations to be approximately $2.5 billion, driven primarily by a larger remodel program. We expect to open 21 new
stores in the U.S. in 2011, adding approximately 15 new locations net of closings and relocations.

We
also expect to continue to execute against our share repurchase plan, although at a slower pace due to our Canadian expansion, investing in the range of $1.5 billion to
$2.0 billion during 2011. The timing and amount of share repurchase activity will be dependent on market conditions and the amount of future net earnings and cash flows.

We
expect our 2011 effective tax rate to be in the range of 36 to 37 percent.

Forward-Looking Statements

This report contains forward-looking statements, which are based on our current assumptions and expectations. These statements are
typically accompanied by the words "expect," "may," "could," "believe," "would," "might," "anticipates," or words of similar import. The principal forward-looking statements in this report include:
For our Retail Segment, our outlook for sales, comparable-store sales trends, including the impact of our store remodel and 5% REDcard Rewards programs, and EBIT margin rates; for our Credit Card
Segment, our outlook for year-end gross credit card receivables, future write-offs of current receivables, rate of portfolio

profitability,
the allowance for doubtful accounts, improvement in portfolio risks, and the pursuit of a portfolio sale; on a consolidated basis, details on the expected investment in Canada and its
impact on our results, statements regarding the adequacy of our sources of liquidity, the continued execution of our share repurchase program, our expected capital expenditures and the number of
stores to be opened in 2011, the expected effective income tax rate, the expected compliance with debt covenants, our intentions regarding future dividends, our expected future share-based
compensation expense, our expected return on plan assets, our expected expense, contributions and benefit payments related to our pension and postretirement health care plans, the adequacy of our
reserves for general liability, workers' compensation, property loss, and team member medical and dental, the potential impact of changes in our critical accounting estimates, the expected outcome of
claims and litigation, and the resolution of tax uncertainties.

All
such forward-looking statements are intended to enjoy the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of
1995, as amended. Although we believe there is a reasonable basis for the forward-looking statements, our actual results could be materially different. The most important factors which could cause our
actual results to differ from our forward-looking statements are set forth on our description of risk factors in Item 1A to this Form 10-K, which should be read in
conjunction with the forward-looking statements in this report. Forward-looking statements speak only as of the date they are made, and we do not undertake any obligation to update any forward-looking
statement.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Our exposure to market risk results primarily from interest rate changes on our debt obligations, some of which are at
a LIBOR-plus floating rate, and on our credit card receivables, the majority of which are assessed finance charges at a Prime based floating rate. To manage our net interest margin, we
generally maintain levels of floating-rate debt to generate similar
changes in net interest expense as finance charge revenues fluctuate. The degree of floating asset and liability matching may vary over time and in different interest rate environments. At
January 29, 2011, the amount of floating-rate credit card assets exceeded the amount of net floating-rate debt obligations by approximately $2 billion. As a
result, based on our balance sheet position at January 29, 2011, the annualized effect of a 0.1 percentage point decrease in floating interest rates on our floating rate debt
obligations, net of our floating rate credit card assets and marketable securities, would be to decrease earnings before income taxes by approximately $2 million. See further description in
Note 20 of the Notes to Consolidated Financial Statements.

We
record our general liability and workers' compensation liabilities at net present value; therefore, these liabilities fluctuate with changes in interest rates. Periodically, in
certain interest rate environments, we economically hedge a portion of our exposure to these interest rate changes by entering into interest rate forward contracts that partially mitigate the effects
of interest rate changes. Based on our balance sheet position at January 29, 2011, the annualized effect of a 0.5 percentage point decrease in interest rates would be to decrease
earnings before income taxes by approximately $10 million.

In
addition, we are exposed to market return fluctuations on our qualified defined benefit pension plans. The annualized effect of a one percentage point decrease in the return on
pension plan assets would decrease plan assets by $25 million at January 29, 2011. The value of our pension liabilities is inversely related to changes in interest rates. To protect
against declines in interest rates we hold high-quality, long-duration bonds and interest rate swaps in our pension plan trust. At year-end, we had hedged
approximately 55 percent of the interest rate exposure of our funded status.

As
more fully described in Note 14 and Note 26 of the Notes to Consolidated Financial Statements, we are exposed to market returns on accumulated team member balances in
our nonqualified, unfunded deferred compensation plans. We control the risk of offering the nonqualified plans by making investments in life insurance contracts and prepaid forward contracts on our
own common stock that offset a substantial portion of our economic exposure to the returns on these plans. The annualized effect of a one percentage point change in market returns on our nonqualified
defined contribution plans (inclusive of the effect of the investment vehicles used to manage our economic exposure) would not be significant.

We
do not currently have significant direct exposure to foreign currency rates as all of our stores are located in the United States, and the vast majority of imported merchandise is
purchased in U.S. dollars. Our previously described agreement to purchase leasehold interests in Canada will expose us to market risk associated with foreign currency exchange rate fluctuations
between the Canadian dollar and the U.S. dollar beginning in 2011.

Overall,
there have been no material changes in our primary risk exposures or management of market risks since the prior year.

Management is responsible for the consistency, integrity and presentation of the information in the Annual Report. The consolidated
financial statements and other information presented in this Annual Report have been prepared in accordance with accounting principles generally accepted in the United States and include necessary
judgments and estimates by management.

To
fulfill our responsibility, we maintain comprehensive systems of internal control designed to provide reasonable assurance that assets are safeguarded and transactions are executed in
accordance with established procedures. The concept of reasonable assurance is based upon recognition that the cost of the controls should not exceed the benefit derived. We believe our systems of
internal control provide this reasonable assurance.

The
Board of Directors exercised its oversight role with respect to the Corporation's systems of internal control primarily through its Audit Committee, which is comprised of independent
directors. The Committee oversees the Corporation's systems of internal control, accounting practices, financial reporting and audits to assess whether their quality, integrity and objectivity are
sufficient to protect shareholders' investments.

In
addition, our consolidated financial statements have been audited by Ernst & Young LLP, independent registered public accounting firm, whose report also appears on this page.

We have audited the accompanying consolidated statements of financial position of Target Corporation and subsidiaries (the Corporation) as of January 29,
2011 and January 30, 2010, and the related consolidated statements of operations, cash flows, and shareholders' investment for each of the three years in the period ended January 29,
2011. Our audits also included the financial statement schedule listed in Item 15(a). These financial statements and schedule are the
responsibility of the Corporation's management. Our responsibility is to express an opinion on these financial statements and schedule based on our audits.

We
conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our opinion.

In
our opinion, the financial statements referred to above present fairly, in all material respects, the consolidated financial position of Target Corporation and subsidiaries at
January 29, 2011 and January 30, 2010, and the consolidated results of their operations and their cash flows for each of the three years in the period ended January 29, 2011, in
conformity with U.S. generally accepted accounting principles. Also, in our opinion, the related financial statement schedule, when considered in relation to the basic financial statements taken as a
whole, presents fairly in all material respects the information set forth therein.

We
also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the Corporation's internal control over financial reporting as of
January 29, 2011, based on criteria established in Internal ControlIntegrated Framework, issued by the Committee of Sponsoring
Organizations of the Treadway Commission and our report dated March 11, 2011, expressed an unqualified opinion thereon.

Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is
defined in Exchange Act Rules 13a-15(f). Under the supervision and with the participation of our management, including our chief executive officer and chief financial officer, we
assessed the effectiveness of our internal control over financial reporting as of January 29, 2011, based on the framework in Internal ControlIntegrated
Framework, issued by the Committee of Sponsoring Organizations of the Treadway
Commission. Based on our assessment, we conclude that the Corporation's internal control over financial reporting is effective based on those criteria.

Our
internal control over financial reporting as of January 29, 2011, has been audited by Ernst & Young LLP, the independent registered accounting firm who has also audited
our consolidated financial statements, as stated in their report which appears on this page.

Report of Independent Registered Public Accounting Firm on Internal Control over Financial Reporting

The Board of Directors and Shareholders
Target Corporation

We have audited Target Corporation and subsidiaries' (the Corporation) internal control over financial reporting as of January 29, 2011, based on criteria
established in Internal ControlIntegrated Framework, issued by the Committee of Sponsoring Organizations of the Treadway Commission (the COSO
criteria). The Corporation's management is responsible for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness
of internal control over financial reporting included in the accompanying Report of Management on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the
Corporation's internal control over financial reporting based on our audit.

We
conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control
over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and
performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

A
company's internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of
financial statements for external purposes in accordance with generally accepted accounting principles. A company's internal control over financial reporting includes those policies and procedures
that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company, (2) provide
reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles and that receipts and
expenditures of the company are being made only in accordance with authorizations of management and directors of the company, and (3) provide reasonable assurance regarding prevention or timely
detection of unauthorized acquisition, use or disposition of the company's assets that could have a material effect on the financial statements.

Because
of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future
periods are subject to the risk that controls may become inadequate because of changes in conditions or that the degree of compliance with the policies or procedures may deteriorate.

In
our opinion, the Corporation maintained, in all material respects, effective internal control over financial reporting as of January 29, 2011, based on the COSO criteria.

We
also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated statements of financial position of Target
Corporation and subsidiaries as of January 29, 2011 and January 30, 2010, and the related consolidated statements of operations, cash flows and shareholders' investment for each of the
three years in the period ended January 29, 2011, and our report dated March 11, 2011, expressed an unqualified opinion thereon.

Cash paid for income taxes was $1,259, $1,040 and $1,399 during 2010, 2009 and 2008, respectively. Cash paid for
interest (net of interest capitalized) was $752, $805 and $873 during 2010, 2009 and 2008, respectively.

Consolidation The consolidated financial statements include the balances of the Corporation and its subsidiaries after elimination of intercompany balances and
transactions. All material subsidiaries are wholly owned. We consolidate variable interest entities where it has been determined that the Corporation is the primary beneficiary of those entities'
operations. The variable interest entity consolidated is a bankruptcy-remote subsidiary through which we sell certain accounts receivable as a method of providing funding for our accounts receivable.

Use of estimates The preparation of our consolidated financial statements in conformity with U.S. generally accepted accounting principles (GAAP) requires
management to make estimates and assumptions affecting reported amounts in the consolidated financial statements and accompanying notes. Actual results may differ significantly from those estimates.

Fiscal year Our fiscal year ends on the Saturday nearest January 31. Unless otherwise stated, references to years in this report relate to fiscal years,
rather than to calendar years. Fiscal year 2010 ended January 29, 2011, and consisted of 52 weeks. Fiscal year 2009 ended January 30, 2010, and consisted of 52 weeks.
Fiscal year 2008 ended January 31, 2009, and consisted of 52 weeks.

Reclassifications Certain prior year amounts have been reclassified to conform to the current year
presentation. Accounting policies applicable to the items discussed in the Notes to the Consolidated Financial Statement are described in the respective notes.

2. Revenues

Our retail stores generally record revenue at the point of sale. Sales from our online business include shipping revenue and are
recorded upon delivery to the guest. Total revenues do not include sales tax as we consider ourselves a pass-through conduit for collecting and remitting sales taxes. Generally, guests may return
merchandise within 90 days of purchase. Revenues are recognized net of expected returns, which we estimate using historical return patterns as a percentage of sales. Commissions earned on sales
generated by leased departments are included within sales and were $20 million in 2010, $18 million in 2009 and $19 million in 2008.

Revenue
from gift card sales is recognized upon gift card redemption. Our gift cards do not have expiration dates. Based on historical redemption rates, a small and relatively stable
percentage of gift cards will never be redeemed, referred to as "breakage." Estimated breakage revenue is recognized over time in proportion to actual gift card redemptions and was not material in
2010, 2009 and 2008.

Credit
card revenues are recognized according to the contractual provisions of each credit card agreement. When accounts are written off, uncollected finance charges and late fees are
recorded as a reduction of credit card revenues. Target retail sales charged on our credit cards totaled $3,455 million, $3,328 million and $3,948 million in 2010, 2009 and 2008,
respectively.

Beginning
April 2010, all new qualified credit card applicants receive the Target Card, and we no longer issue the Target Visa to credit card applicants. Existing Target Visa cardholders
are not affected. Beginning October 2010, guests receive a 5 percent discount on virtually all purchases at checkout every day when they use a REDcard at any Target store or on Target.com.
Target's REDcards include the Target Credit Card, Target Visa Credit Card and

Target
Debit Card. This new REDcard Rewards program replaced the existing rewards program in which account holders received an initial 10 percent-off coupon for opening the account
and earned points toward a 10 percent-off coupon on subsequent purchases. These changes are intended to simplify the program and to generate profitable incremental retail sales. The
discounts associated with our REDcard Rewards program are included as reductions in sales in our Consolidated Statements of Operations and were $162 million in 2010, $94 million in 2009
and $114 million in 2008.

3. Cost of Sales and Selling, General and Administrative Expenses

The following table illustrates the primary costs classified in each major expense category:

Cost of Sales

Selling, General and Administrative Expenses

Total cost of products sold including
 Freight expenses associated with moving
merchandise from our vendors to our
distribution centers and our retail stores, and
among our distribution and retail facilities
 Vendor income that is not reimbursement of
specific, incremental and identifiable costs
Inventory shrink
Markdowns
Outbound shipping and handling expenses
associated with sales to our guests
Payment term cash discounts
Distribution center costs, including compensation
and benefits costs

Compensation and benefit costs including
 Stores
 Headquarters
Occupancy and operating costs of retail and
headquarters facilities
Advertising, offset by vendor income that is a
reimbursement of specific, incremental and
identifiable costs
Pre-opening costs of stores and other facilities
Other administrative costs

The classification of these expenses varies across the retail industry.

4. Consideration Received from Vendors

We receive consideration for a variety of vendor-sponsored programs, such as volume rebates, markdown allowances, promotions and
advertising allowances and for our compliance programs, referred to as "vendor income." Vendor income reduces either our inventory costs or SG&A expenses based on the provisions of the arrangement.
Promotional and advertising allowances are intended to offset our costs of promoting and selling merchandise in our stores. Under our compliance programs, vendors are charged for merchandise shipments
that do not meet our requirements (violations), such as late or incomplete shipments. These allowances are recorded when violations occur. Substantially all consideration received is recorded as a
reduction of cost of sales.

We
establish a receivable for vendor income that is earned but not yet received. Based on provisions of the agreements in place, this receivable is computed by estimating the amount
earned when we have completed our performance. We perform detailed analyses to determine the appropriate level of the receivable in the aggregate. The majority of year-end receivables
associated with these activities are collected within the following fiscal quarter.

5. Advertising Costs

Advertising costs are expensed at first showing or distribution of the advertisement and were $1,292 million in 2010,
$1,167 million in 2009 and $1,233 million in 2008. Advertising vendor income that offset advertising expenses was approximately $216 million, $179 million and
$188 million in 2010, 2009 and 2008, respectively. Newspaper circulars and media broadcast made up the majority of our advertising costs in all three years.

Basic earnings per share (EPS) is calculated as net earnings divided by the weighted average number of common shares outstanding during
the period. Diluted EPS includes the potentially dilutive impact of stock-based awards outstanding at period end, consisting of the incremental shares assumed to be issued upon the exercise of stock
options and the incremental shares assumed to be issued under performance share and restricted stock unit arrangements.

Earnings Per Share(millions, except per share data)

2010

2009

2008

Net earnings

$

2,920

$

2,488

$

2,214

Basic weighted average common shares outstanding

723.6

752.0

770.4

Dilutive impact of stock-based awards

5.8

2.8

3.2

Diluted weighted average common shares outstanding

729.4

754.8

773.6

Basic earnings per share

$

4.03

$

3.31

$

2.87

Diluted earnings per share

$

4.00

$

3.30

$

2.86

For the 2010, 2009 and 2008 EPS computations, 10.9 million, 22.9 million and 17.4 million stock options, respectively, were
excluded from the calculation of weighted average shares for diluted EPS because their effects were antidilutive.

7. Other Comprehensive Income/(Loss)

Other comprehensive income/(loss) includes revenues, expenses, gains and losses that are excluded from net earnings under GAAP and are
recorded directly to shareholders' investment. In 2010, 2009 and 2008, other comprehensive income/(loss) included gains and losses on certain hedge transactions, foreign currency translation
adjustments and amortization of pension and postretirement plan amounts, net of related taxes. Significant items affecting other comprehensive income/(loss) are shown in the Consolidated Statements of
Shareholders' Investment.

8. Fair Value Measurements

Fair value is the price at which an asset could be exchanged in a current transaction between knowledgeable, willing parties. A
liability's fair value is defined as the amount that would be paid to transfer the liability to a new obligor, not the amount that would be paid to settle the liability with
the creditor. Fair value measurements are categorized into one of three levels based on the lowest level of significant input used: Level 1 (unadjusted quoted prices in active markets);
Level 2 (observable market inputs available at the measurement date, other than quoted prices included in Level 1); and Level 3 (unobservable inputs that cannot be corroborated by
observable market data).

The
following table presents financial assets and liabilities measured at fair value on a recurring basis:

Fair Value at January 29, 2011

Fair Value at January 30, 2010

Fair Value Measurements  Recurring Basis(millions)

Level 1

Level 2

Level 3

Level 1

Level 2

Level 3

Assets

Cash and cash equivalents

Marketable securities

$

1,129

$



$



$

1,617

$



$



Other current assets

Prepaid forward contracts

63





79





Other noncurrent assets

Interest rate swaps (a)



139





131



Company-owned life insurance investments (b)



358





319



Total

$

1,192

$

497

$



$

1,696

$

450

$



Liabilities

Other noncurrent liabilities

Interest rate swaps

$



$

54

$



$



$

23

$



Total

$



$

54

$



$



$

23

$



(a)

There were no interest rate swaps designated as accounting hedges at January 29, 2011 or January 30, 2010.

(b)

Company-owned life insurance investments consist of equity index funds and fixed income assets. Amounts are presented net of loans that are secured by some of these policies of
$645 million at January 29, 2011 and $620 million at January 30, 2010.

Initially valued at transaction price. Subsequently valued by reference to the market price of Target common stock.

Interest rate swaps

Valuation models are calibrated to initial trade price. Subsequent valuations are based on observable inputs to the valuation
model (e.g., interest rates and credit spreads). Model inputs are changed only when corroborated by market data. A credit risk adjustment is made on each swap using observable market credit
spreads.

Company-owned life insurance investments

Includes investments in separate accounts that are valued based on market rates credited by the insurer.

Certain assets are measured at fair value on a nonrecurring basis; that is, the assets are not measured at fair value on an ongoing basis but are
subject to fair value adjustments only in certain circumstances (for example, when there is evidence of impairment). The fair value measurements related to long-lived assets held for sale
and held and used in the following table were determined using available market prices at the measurement date based on recent investments or pending transactions of similar assets, third-party
independent appraisals, valuation multiples or public comparables, less cost to sell where appropriate. We classify these measurements as Level 2. The fair value measurement of an intangible
asset was determined using unobservable inputs that reflect our own

assumptions
regarding how market participants price the intangible assets at the measurement date. We classify these measurements as Level 3.

Fair Value Measurements  Nonrecurring Basis

Other current assets

Property and equipment

Other noncurrent assets

Long-lived assets held for sale

Long-lived assets held and used (a)

(millions)

Intangible asset

Measured during the year ended January 29, 2011:

Carrying amount

$

9

$

127

$



Fair value measurement

7

101



Gain/(loss)

$

(2

)

$

(26

)

$



Measured during the year ended January 30, 2010:

Carrying amount

$

74

$

98

$

6

Fair value measurement

57

66



Gain/(loss)

$

(17

)

$

(32

)

$

(6

)

(a)

Primarily relates to real estate and buildings intended for sale in the future but not currently meeting the held for sale criteria.

The following table presents the carrying amounts and estimated fair values of financial instruments not measured at fair value in the
Consolidated Statements of Financial Position. The fair value of marketable securities is determined using available market prices at the reporting date. The fair value of debt is generally
measured using a discounted cash flow analysis based on our current market interest rates for similar types of financial instruments.

Financial Instruments Not Measured at Fair Value

January 29, 2011

January 30, 2010

(millions)

Carrying
Amount

Fair
Value

Carrying
Amount

Fair
Value

Financial assets

Other current assets

Marketable securities (a)

$

32

$

32

$

27

$

27

Other noncurrent assets

Marketable securities (a)

4

4

5

5

Total

$

36

$

36

$

32

$

32

Financial liabilities

Total debt (b)

$

15,241

$

16,661

$

16,447

$

17,487

Total

$

15,241

$

16,661

$

16,447

$

17,487

(a)

Amounts include held-to-maturity government and money market investments that are held to satisfy the regulatory requirements of Target Bank and Target
National Bank.

The carrying amounts of credit card receivables, net of allowance, accounts payable, and certain accrued and other current liabilities approximate
fair value at January 29, 2011.

9. Cash Equivalents

Cash equivalents include highly liquid investments with an original maturity of three months or less from the time of purchase. Cash
equivalents also include amounts due from third-party financial institutions for credit and debit card transactions. These receivables typically settle in less than five days and were
$313 million at January 29, 2011 and January 30, 2010. Payables due to Visa resulting from the use of Target Visa Cards are included within cash equivalents and were
$36 million and $40 million at January 29, 2011 and January 30, 2010, respectively.

Credit card receivables are recorded net of an allowance for doubtful accounts and are our only significant class of receivables.
Substantially all accounts continue to accrue finance charges until they are written off. All past due accounts were incurring finance charges at January 29, 2011 and January 30, 2010.
Accounts are written off when they become 180 days past due.

Age of Credit Card Receivables

2010

2009

(dollars in millions)

Amount

Percent of
Receivables

Amount

Percent of
Receivables

Current

$

6,132

89.6%

$

6,935

86.9%

1-29 days past due

292

4.3%

337

4.2%

30-59 days past due

131

1.9%

206

2.6%

60-89 days past due

79

1.1%

133

1.6%

90+ days past due

209

3.1%

371

4.7%

Period-end gross credit card receivables

$

6,843

100%

$

7,982

100%

Allowance for Doubtful Accounts

The
allowance for doubtful accounts is recognized in an amount equal to the anticipated future write-offs of existing receivables and includes
provisions for uncollectible finance charges and other credit-related fees. We estimate future write-offs on the entire credit card portfolio collectively based on historical experience of
delinquencies, risk scores, aging trends and industry risk trends.

Allowance for Doubtful Accounts(millions)

2010

2009

Allowance at beginning of period

$

1,016

$

1,010

Bad debt expense

528

1,185

Write-offs (a)

(1,007

)

(1,287

)

Recoveries (a)

153

108

Allowance at end of period

$

690

$

1,016

(a)

Write-offs include the principal amount of losses (excluding accrued and unpaid finance charges), and recoveries include current period principal collections on previously
written-off balances. These amounts combined represent net write-offs.

Deterioration of the macroeconomic conditions in the United States would adversely affect the risk profile of our credit card receivables
portfolio based on credit card holders' ability to pay their balances. If such deterioration were to occur, it would lead to an increase in bad debt expense. The Corporation monitors both the credit
quality and the delinquency status of the credit card receivables portfolio. We consider accounts 30 or more days past due as delinquent, and we update delinquency status daily. We also monitor risk
in the portfolio by assigning internally generated scores to each account and by periodically obtaining a statistically representative sample of current FICO scores, a nationally recognized credit
scoring model. We update these FICO scores monthly, most recently in

January
2011. The credit quality segmentation presented below is consistent with the approach used in determining our allowance for doubtful accounts.

Receivables Credit Quality
(millions)

2010

2009

Nondelinquent accounts (Current and 1 - 29 days past due)

FICO score of 700 or above

$

2,819

$

2,886

FICO score of 600 to 699

2,737

3,114

FICO score below 600

868

1,272

Total nondelinquent accounts

6,424

7,272

Delinquent accounts (30+ days past due)

419

710

Period-end gross credit card receivables

$

6,843

$

7,982

Under certain circumstances, we offer cardholder payment plans that modify finance charges and minimum payments, which meet the accounting
definition of a troubled debt restructuring (TDR). These concessions are made on an individual cardholder basis for economic or legal reasons specific to each individual cardholder's circumstances. As
a percentage of period-end gross receivables, receivables classified as TDRs were 5.9 percent at January 29, 2011 and 6.7 percent at January 30, 2010.
Receivables classified as TDRs are treated consistently with other aged receivables in determining our allowance for doubtful accounts.

Funding
for Credit Card Receivables

As
a method of providing funding for our credit card receivables, we sell, on an ongoing basis, all of our consumer credit card receivables to Target
Receivables LLC (TR LLC), formerly known as Target Receivables Corporation (TRC), a wholly owned, bankruptcy remote subsidiary. TR LLC then transfers the receivables to the Target
Credit Card Master Trust (the Trust), which from time to time will sell debt securities to third parties, either directly or through a related trust. These debt securities represent undivided
interests in the Trust assets. TR LLC uses the proceeds from the sale of debt securities and its share of collections on the receivables to pay the purchase price of the receivables to the
Corporation.

We
consolidate the receivables within the Trust and any debt securities issued by the Trust, or a related trust, in our Consolidated Statements of Financial Position based upon the
applicable accounting guidance. The receivables transferred to the Trust are not available to general creditors of the Corporation.

In
2005, we entered into a public securitization of our credit card receivables. Note holders participating in this securitization were entitled to receive annual interest payments based
on LIBOR plus a spread. The final payment on this securitization was made in April of 2010 as discussed in Note 19.

During
2006 and 2007, we sold an interest in our credit card receivables by issuing a Variable Funding Certificate. Parties who hold the Variable Funding Certificate receive interest at
a variable short-term market rate. The Variable Funding Certificate matures in 2012 and 2013.

In
the second quarter of 2008, we sold an interest in our credit card receivables to JPMorgan Chase (JPMC). The interest sold represented 47 percent of the receivables portfolio
at the time of the transaction. In the event of a decrease in the receivables principal amount such that JPMC's interest in the entire portfolio would exceed 47 percent for three consecutive
months, TR LLC (using the cash flows from the assets in the Trust) would be required to pay JPMC a pro rata amount of principal collections such that the portion owned by JPMC would not exceed
47 percent, unless JPMC provides a waiver. Conversely, at the option of the Corporation, JPMC may be required to fund an increase in the portfolio to maintain their 47 percent interest
up to a maximum principal balance of $4.2 billion. Due to declines in gross credit card receivables, TR LLC repaid
JPMC $566 million during 2010 and $163 million during 2009 under the terms of this agreement. No payments were made during 2008.

If
a three-month average of monthly finance charge excess (JPMC's prorata share of finance charge collections less write-offs and specified expenses) is less than
2 percent of the outstanding principal balance of JPMC's interest, the Corporation must implement mutually agreed-upon underwriting strategies. If the three-month average finance
charge excess falls below 1 percent of the outstanding principal balance of JPMC's interest, JPMC

may
compel the Corporation to implement underwriting and collections activities, provided those activities are compatible with the Corporation's systems, as well as consistent with similar credit card
receivable portfolios managed by JPMC. If the Corporation fails to implement the activities, JPMC has the right to cause the accelerated repayment of the note payable issued in the transaction. As
noted in the preceding paragraph, payments would be made solely from the Trust assets.

All
interests in our Credit Card Receivables issued by the Trust are accounted for as secured borrowings. Interest and principal payments are satisfied provided the cash flows from the
Trust assets are sufficient and are nonrecourse to the general assets of the Corporation. If the cash flows are less than the periodic interest, the available amount, if any, is paid with respect to
interest. Interest shortfalls will be paid to the extent subsequent cash flows from the assets in the Trust are sufficient. Future principal payments will be made from the third party's prorata share
of cash flows from the Trust assets.

2010

2009

Securitized Borrowings(millions)

Debt Balance

Collateral

Debt Balance

Collateral

2008 Series (a)

$

2,954

$

3,061

$

3,475

$

3,652

2006/2007 Series

1,000

1,266

1,000

1,266

2005 Series





900

1,154

Total

$

3,954

$

4,327

$

5,375

$

6,072

(a)

The debt balance for the 2008 Series is net of a 7% discount from JPMC. The unamortized portion of this discount was $107 million and $177 million as of
January 29, 2011, and January 30, 2010, respectively.

11. Inventory

Substantially our entire inventory and the related cost of sales are accounted for under the retail inventory accounting method (RIM)
using the last-in, first-out (LIFO) method. Inventory is stated at the lower of LIFO cost or market. Cost includes purchase price as reduced by vendor income. Inventory is also
reduced for estimated losses related to shrink and markdowns. The LIFO provision is calculated based on inventory levels, markup rates and internally measured retail price indices.

Under
RIM, inventory cost and the resulting gross margins are calculated by applying a cost-to-retail ratio to the retail value inventory. RIM is an averaging
method that has been widely used in the retail industry due to its practicality. The use of RIM will result in inventory being valued at the lower of cost or market because permanent markdowns are
currently taken as a reduction of the retail value of inventory.

We
routinely enter into arrangements with vendors whereby we do not purchase or pay for merchandise until the merchandise is ultimately sold to a guest. Revenues under this program are
included in sales in the Consolidated Statements of Operations, but the merchandise received under the program is not included in inventory in our Consolidated Statements of Financial Position because
of the virtually simultaneous purchase and sale of this inventory. Sales made under these arrangements totaled $1,581 million in 2010, $1,470 million in 2009 and $1,538 million in
2008.

Property and equipment are recorded at cost, less accumulated depreciation. Depreciation is computed using the
straight-line method over estimated useful lives or lease terms if shorter. We amortize leasehold improvements purchased after the beginning of the initial lease term over the shorter of
the assets' useful lives or a term that includes the original lease term, plus any renewals that are reasonably assured at the date the leasehold improvements are acquired. Depreciation expense for
2010, 2009 and 2008 was $2,060 million, $1,999 million and $1,804 million, respectively. For income tax purposes, accelerated depreciation methods are generally used. Repair and
maintenance costs are expensed as incurred and were $726 million in 2010, $632 million in 2009 and $609 million in 2008. Facility pre-opening costs, including supplies
and payroll, are expensed as incurred.

Estimated Useful Lives

Life (in years)

Buildings and improvements

8-39

Fixtures and equipment

3-15

Computer hardware and software

4-7

Long-lived assets are reviewed for impairment when events or changes in circumstances indicate that the asset's carrying value may not
be recoverable. Impairments of $28 million in 2010, $49 million in 2009 and $2 million in 2008 were recorded as a result of the reviews performed. Additionally, due to project
scope changes, we wrote off capitalized construction in progress costs of $6 million in 2010, $37 million in 2009 and $26 million in 2008.

14. Other Noncurrent Assets

Other Noncurrent Assets
(millions)

January 29,
2011

January 30,
2010

Company-owned life insurance investments (a)

$

358

$

319

Goodwill and intangible assets

223

239

Interest rate swaps (b)

139

131

Other

279

140

Total

$

999

$

829

(a)

Company-owned life insurance policies on approximately 4,000 team members who are designated highly compensated under the Internal Revenue Code and have given their consent to be
insured. Amounts are presented net of loans that are secured by some of these policies.

Goodwill and intangible assets are recorded within other noncurrent assets. Goodwill totaled $59 million at January 29,
2011 and January 30, 2010. Goodwill and indefinite-lived intangible assets are not amortized; instead, they are tested for impairment annually and whenever events or changes in circumstances
indicate the carrying value of the asset may not be recoverable. Definite-lived intangible assets are amortized over their expected economic useful life and are tested for impairment whenever events
or changes in circumstances indicate the carrying value of the asset may not be recoverable. Discounted cash flow models are used in determining fair value

Amortization is computed on definite-lived intangible assets using the straight-line method over estimated useful lives that typically
range from 9 to 39 years for leasehold acquisition costs and from 3 to 15 years for other intangible assets. The weighted average life of leasehold acquisition costs and other intangible
assets was 29 years and 4 years, respectively, at January 29, 2011. Amortization expense for 2010, 2009 and 2008 was $24 million, $24 million and $21 million,
respectively.

Estimated Amortization Expense
(millions)

2011

2012

2013

2014

2015

Amortization expense

$

22

$

16

$

13

$

11

$

11

16. Accounts Payable

We reclassify book overdrafts to accounts payable at period end. Overdrafts reclassified to accounts payable were $558 million
at January 29, 2011 and $518 million at January 30, 2010.

17. Accrued and Other Current Liabilities

Accrued and Other Current Liabilities
(millions)

January 29,
2011

January 30,
2010

Wages and benefits

$

921

$

959

Taxes payable (a)

497

490

Gift card liability (b)

422

387

Straight-line rent accrual (c)

200

185

Dividends payable

176

127

Workers' compensation and general liability

158

163

Income tax payable

144

24

Interest payable

103

105

Other

705

680

Total

$

3,326

$

3,120

(a)

Taxes payable consist of real estate, team member withholdings and sales tax liabilities.

(b)

Gift card liability
represents the amount of gift cards that have been issued but have not been redeemed, net of estimated breakage.

(c)

Straight-line rent accrual represents the amount of rent
expense recorded that exceeds cash payments remitted in connection with operating leases.

18. Commitments and Contingencies

In January 2011, we entered into an agreement to purchase the leasehold interests in up to 220 sites in Canada currently operated by
Zellers Inc., in exchange for C$1,825 million (Canadian dollars), due in two payments, one in May 2011 and one in September 2011. We believe this transaction will allow us to open 100 to
150 Target stores in

Canada,
primarily during 2013. We expect that renovation of these stores will require an investment of over C$1 billion, a portion of which may be funded by landlords. At January 29,
2011 the value of C$1.00 approximated the value of $1.00.

Purchase
obligations, which include all legally binding contracts, such as firm commitments for inventory purchases, merchandise royalties, equipment purchases, marketing-related
contracts, software acquisition/license commitments and service contracts, were approximately $1,907 million and $2,016 million at January 29, 2011 and January 30, 2010,
respectively. We issue inventory purchase orders, which represent authorizations to purchase that are cancelable by their terms. We do not consider purchase orders to be firm inventory commitments. If
we choose to cancel a purchase order, we may be obligated to reimburse the vendor for unrecoverable outlays incurred prior to cancellation. We also issue trade letters of credit in the ordinary course
of business, which are not obligations given they are conditioned on terms of the letter of credit being met.

Trade
letters of credit totaled $1,522 million and $1,484 million at January 29, 2011 and January 30, 2010, respectively, a portion of which are reflected in
accounts payable. Standby letters of credit, relating primarily to retained risk on our insurance claims, totaled $71 million and $72 million at January 29, 2011 and
January 30, 2010, respectively.

We
are exposed to claims and litigation arising in the ordinary course of business and use various methods to resolve these matters in a manner that we believe serves the best interest
of our shareholders and other constituents. We believe the recorded reserves in our consolidated financial statements are adequate in light of the probable and estimable liabilities. We do not believe
that any of the currently identified claims or litigation matters will have a material adverse impact on our results of operations, cash flows or financial condition.

19. Notes Payable and Long-Term Debt

We obtain short-term financing throughout the year under our commercial paper program, a form of notes payable.

Commercial Paper(millions)

2010

2009

Maximum daily amount outstanding during the year

$



$

112

Average amount outstanding during the year



1

Amount outstanding at year-end





Weighted average interest rate



0.2%

An additional source of liquidity is available to us through a committed $2 billion unsecured revolving credit facility obtained through a
group of banks in April 2007, which will expire in April 2012. No balances were outstanding at any time during 2010 or 2009 under this credit facility.

In
July 2010, we issued $1 billion of long-term debt at 3.875% that matures in July 2020. There were no amounts issued in 2009.

As further explained in Note 10, we maintain an accounts receivable financing program through which we sell credit card receivables to a bankruptcy remote,
wholly owned subsidiary, which in turn transfers the receivables to a Trust. The Trust, either directly or through related trusts, sells debt securities to third parties. The following summarizes this
activity for 2009 and 2010.

Nonrecourse Debt Collateralized by Credit Card Receivables(millions)

2010

2009

Balance at beginning of period

$

5,375

$

5,490

Issued





Accretion (a)

45

48

Repaid (b)

(1,466

)

(163

)

Balance at end of period

$

3,954

$

5,375

(a)

Represents the accretion of the 7 percent discount on the 47 percent interest in credit card receivables sold to JPMC.

(b)

Includes repayments of $566 million and $163 million for the 2008 series of secured borrowings during 2010 and 2009 due to declines in gross credit card receivables and
payment of $900 million to repurchase and retire in full the 2005 series of secured borrowings at par in April 2010, that otherwise would have matured in October 2010.

Other than debt backed by our credit card receivables and other immaterial borrowings, all of our outstanding borrowings are senior, unsecured
obligations.

At
January 29, 2011, the carrying value and maturities of our debt portfolio, including unamortized hedged debt valuation gains from terminated or de-designated
interest rate swaps, were as follows:

January 29, 2011

Debt Maturities(millions)

Rate (a)

Balance

Due fiscal 2011-2015

3.2

%

$

6,090

Due fiscal 2016-2020

5.4

4,299

Due fiscal 2021-2025

8.9

120

Due fiscal 2026-2030

6.7

326

Due fiscal 2031-2035

6.6

906

Due fiscal 2036-2037

6.8

3,500

Total notes and debentures

5.0

15,241

Unamortized swap valuation adjustments

152

Capital lease obligations

333

Less:

Amounts due within one year

(119

)

Long-term debt

$

15,607

(a)

Reflects the weighted average stated interest rate as of year-end.

Required principal payments on notes and debentures over the next five years, excluding capital lease obligations, are as follows:

Required Principal Payments (a)
(millions)

2011

2012

2013

2014

2015

Unsecured

$

106

$

1,501

$

501

$

1

$

27

Nonrecourse



750

3,311





Total required principal payments

$

106

$

2,251

$

3,812

$

1

$

27

(a)

The required principal payments presented in this table do not consider the potential accelerated repayment requirements under our agreement with JPMC in the event of a decrease in
credit card receivables.

Most of our long-term debt obligations contain covenants related to secured debt levels. In addition to a secured debt level covenant,
our credit facility also contains a debt leverage covenant. We are, and expect to remain, in compliance with these covenants.

Derivative financial instruments are reported at fair value on the Consolidated Statements of Financial Position. Historically our
derivative instruments have primarily consisted of interest rate swaps. We use these derivatives to mitigate our interest rate risk. We have counterparty credit risk resulting from our derivative
instruments. This risk lies primarily with two global financial institutions. We monitor this concentration of counterparty credit risk on an ongoing basis.

Prior
to 2009, the majority of our derivative instruments qualified for fair value hedge accounting treatment. The changes in market value of an interest rate swap, as well as the
offsetting change in market value of the hedged debt, were recognized within earnings in the current period. We assessed at the inception of the hedge whether the hedging derivatives were highly
effective in offsetting changes in fair value or cash flows of hedged items. Ineffectiveness resulted when changes in the market value of the hedged debt were not completely offset by changes in the
market value of the interest rate swap. For those derivatives whose terms met the conditions of the "short-cut method," 100 percent hedge effectiveness was assumed. There was no
ineffectiveness recognized in 2010, 2009 or 2008 related to our derivative instruments. As detailed below, at January 29, 2011, there were no derivative instruments designated as accounting
hedges.

During
the first quarter of 2008, we terminated certain "pay floating" interest rate swaps with a combined notional amount of $3,125 million for cash proceeds of
$160 million, which are classified within other operating cash flows in the Consolidated Statements of Cash Flows. These swaps were designated as hedges; therefore, concurrent with their
terminations, we were required to stop making market value adjustments to the associated hedged debt. Gains realized upon termination will be amortized into earnings over the remaining life of the
associated hedged debt.

Additionally,
during 2008, we de-designated certain "pay floating" interest rate swaps, and upon de-designation, these swaps no longer qualified for hedge
accounting treatment. As a result of the de-designation, the unrealized gains on these swaps determined at the date of de-designation will be amortized into earnings over the
remaining lives of the previously hedged items.

In
2010, 2009 and 2008, total net gains amortized into net interest expense for terminated and de-designated swaps were $45 million, $60 million and
$55 million, respectively. The amount remaining on unamortized hedged debt valuation gains from terminated and de-designated interest rate swaps that will be amortized into earnings
over the remaining lives of the previously hedged debt totaled $152 million, $197 million and $263 million, at the end of 2010, 2009 and 2008, respectively.

Simultaneous
to the de-designations during 2008, we entered into "pay fixed" swaps to economically hedge the risks associated with the de-designated "pay
floating" swaps. These swaps are not designated as hedging instruments and along with the de-designated "pay floating" swaps are measured at fair value on a quarterly basis.

Periodic payments, valuation adjustments and amortization of gains or losses from the termination or de-designation of derivative
contracts are summarized below:

Derivative Contracts  Effect on Results of Operations(millions)

Income/(Expense)

Type

Classification

2010

2009

2008

Interest rate swaps

Other interest expense

$

51

$

65

$

71

Total

$

51

$

65

$

71

21. Leases

We lease certain retail locations, warehouses, distribution centers, office space, land, equipment and software. Assets held under
capital leases are included in property and equipment. Operating lease rentals are expensed on a straight-line basis over the life of the lease beginning on the date we take possession of
the property. At lease inception, we determine the lease term by assuming the exercise of those renewal options that are reasonably assured. The exercise of lease renewal options is at our sole
discretion. The expected lease term is used to determine whether a lease is capital or operating and is used to calculate straight-line rent expense. Additionally, the depreciable life of
leased buildings and leasehold improvements is limited by the expected lease term.

Rent
expense is included in SG&A expenses. Some of our lease agreements include rental payments based on a percentage of retail sales over contractual levels. Certain leases require us
to pay real estate taxes, insurance, maintenance and other operating expenses associated with the leased premises. These expenses are classified in

SG&A,
consistent with similar costs for owned locations. Sublease income received from tenants who rent properties is recorded as a reduction to SG&A expense.

Rent Expense(millions)

2010

2009

2008

Property and equipment

$

188

$

187

$

184

Software

25

27

24

Sublease income

(13

)

(13

)

(15

)

Total rent expense

$

200

$

201

$

193

Most long-term leases include one or more options to renew, with renewal terms that can extend the lease term from one to more than
50 years. Certain leases also include options to purchase the leased property.

Future Minimum Lease Payments(millions)

Operating Leases (a)

Capital Leases

Sublease Income

Total

2011

$

190

$

31

$

(11

)

$

210

2012

189

32

(8

)

213

2013

187

32

(7

)

212

2014

147

32

(6

)

173

2015

141

30

(6

)

165

After 2015

3,100

432

(35

)

3,497

Total future minimum lease payments

$

3,954

$

589

$

(73

)

$

4,470

Less: Interest (b)

(256

)

Present value of future minimum capital lease payments (c)

$

333

(a)

Total contractual lease payments include $1,949 million related to options to extend lease terms that are reasonably assured of being exercised and also includes
$241 million of legally binding minimum lease payments for stores that will open in 2011 or later.

(b)

Calculated using the interest rate at inception for each lease.

(c)

Includes the current portion of $12 million.

The future minimum lease payments above do not include any payments associated with the leases that may be acquired under our agreement with
Zellers Inc., described in Note 18.

22. Income Taxes

Deferred tax assets and liabilities are recognized for the future tax consequences attributable to temporary differences between
financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted income tax rates in effect for
the year the temporary differences are expected to be recovered or settled. Tax rate changes affecting deferred tax assets and liabilities are recognized in income at the enactment date. We have not
recorded deferred taxes when earnings from foreign operations are considered to be indefinitely invested outside the U.S. Such amounts are not significant.

Certain discrete state tax items reduced the impact of the state income tax rate, net of federal benefit, by 2.4 percentage points, 0.7 percentage
points, and 0.6 percentage points in 2010, 2009, and 2008, respectively.

Provision for Income Taxes(millions)

2010

2009

2008

Current:

Federal

$

1,086

$

877

$

1,034

State/other

44

143

197

Total current

1,130

1,020

1,231

Deferred:

Federal

388

339

88

State/other

57

25

3

Total deferred

445

364

91

Total provision

$

1,575

$

1,384

$

1,322

Net Deferred Tax Asset/(Liability)(millions)

January 29,
2011

January 30,
2010

Gross deferred tax assets:

Accrued and deferred compensation

$

451

$

538

Allowance for doubtful accounts

229

393

Accruals and reserves not currently deductible

373

380

Self-insured benefits

251

260

Other

67

92

Total gross deferred tax assets

1,371

1,663

Gross deferred tax liabilities:

Property and equipment

(1,607

)

(1,543

)

Deferred credit card income

(145

)

(166

)

Other

(174

)

(64

)

Total gross deferred tax liabilities

(1,926

)

(1,773

)

Total net deferred tax asset/(liability)

$

(555

)

$

(110

)

We file a U.S. federal income tax return and income tax returns in various states and foreign jurisdictions. We are no longer subject to U.S.
federal income tax examinations for years before 2009 and, with few exceptions, are no longer subject to state and local or non-U.S. income tax examinations by tax authorities for years
before 2003.

Reconciliation of Unrecognized Tax Benefit Liabilities(millions)

2010

2009

Balance at beginning of period

$

452

$

434

Additions based on tax positions related to the current year

16

119

Additions for tax positions of prior years

68

47

Reductions for tax positions of prior years

(222

)

(61

)

Settlements

(12

)

(87

)

Balance at end of period

$

302

$

452

If the Corporation were to prevail on all unrecognized tax benefit liabilities recorded, approximately $198 million of the
$302 million reserve would benefit the effective tax rate. In addition, the reversal of accrued penalties and interest would also benefit the effective tax rate. Interest and penalties
associated with unrecognized tax benefit liabilities are recorded within income tax expense. During the years ended January 29, 2011 and January 30, 2010, we recorded a net benefit from
the reversal of accrued penalties and interest of approximately $28 million and $10 million, respectively. During the year ended January 31, 2009, we recorded a net expense for
accrued penalties

and
interest of approximately $33 million. We had accrued for the payment of interest and penalties of approximately $95 million at January 29, 2011 and $127 million at
January 30, 2010.

The
January 30, 2010 liability for uncertain tax positions included $133 million for tax positions for which the ultimate deductibility was highly certain, but for which
there was uncertainty about the timing of such deductibility. During 2010, we filed a tax accounting method change that resolved the uncertainty surrounding the timing of deductions for these tax
positions, resulting in a $133 million decrease to our unrecognized tax benefit liability and no impact on income tax expense in 2010.

In
addition, we resolved various state income tax matters in 2010, resulting in a reduction of approximately $80 million to our unrecognized tax benefit liability, which also
reduced tax expense in 2010. It is reasonably possible that the amount of the unrecognized tax benefit liabilities with respect to our other unrecognized tax positions will increase or decrease during
the next twelve months; however an estimate of the amount or range of the change cannot be made at this time.

During
2009, we filed income tax returns that included tax accounting method changes allowed under applicable tax regulations. These changes resulted in a substantial increase in tax
deductions related to property and equipment, resulting in an increase in noncurrent deferred income tax liabilities of approximately $300 million and a corresponding increase in current income
taxes receivable, which is classified as other current assets in the Consolidated Statements of Financial Position. These changes did not affect income tax expense for 2009.

23. Other Noncurrent Liabilities

Other Noncurrent Liabilities(millions)

January 29,
2011

January 30,
2010

General liability and workers' compensation (a)

$

470

$

490

Deferred compensation

396

353

Income tax

313

579

Pension and postretirement health care benefits

128

178

Other

300

306

Total

$

1,607

$

1,906

(a)

We retain a substantial portion of the risk related to certain general liability and workers' compensation claims. Liabilities associated with these losses include estimates of both
claims filed and losses incurred but not yet reported. We estimate our ultimate cost based on analysis of historical data and actuarial estimates. General liability and workers' compensation
liabilities are recorded at our estimate of their net present value.

24. Share Repurchase

In November 2007, our Board of Directors approved a share repurchase program totaling $10 billion that replaced a prior program.
In November 2008, we announced that, in light of our business outlook, we were temporarily suspending our open-market share repurchase program. In January 2010, we resumed
open-market purchases of shares under this program.

Share
repurchases for the last three years, repurchased primarily through open market transactions, were as follows:

Of the shares reacquired, a portion was delivered upon settlement of prepaid forward contracts as follows:

Settlement of Prepaid Forward Contracts (a)(millions)

Total Cash
Investment

Aggregate
Market Value (b)

2008

$

249

$

251

2009

56

60

2010

56

61

Total

$

361

$

372

(a)

These contracts are among the investment vehicles used to reduce our economic exposure related to our nonqualified deferred compensation plans. The details of our positions in prepaid
forward contracts have been provided in Note 26.

(b)

At their respective settlement dates.

Our share repurchases during 2008 included 30 million shares that were acquired through the exercise of call options.

Call Option Repurchase Details

Number of
Options
Exercised

(amounts per share)

Exercise
Date

Total Cost
(millions)

Series

Premium (a)

Strike Price

Total

Series I

10,000,000

April 2008

$

11.04

$

40.32

$

51.36

$

514

Series II

10,000,000

May 2008

10.87

39.31

50.18

502

Series III

10,000,000

June 2008

11.20

39.40

50.60

506

Total

30,000,000

$

11.04

$

39.68

$

50.71

$

1,522

(a)

Paid in January 2008.

25. Share-Based Compensation

We maintain a long-term incentive plan (the Plan) for key team members and non-employee members of our Board of
Directors. Our long-term incentive plan allows us to grant equity-based compensation awards, including stock options, stock appreciation rights, performance share units, restricted stock
units, restricted stock awards or a combination of awards (collectively, share-based awards). The number of unissued common shares reserved for future grants under the Plan was 17,552,454 at
January 29, 2011 and 21,450,009 at January 30, 2010.

Total
share-based compensation expense recognized in the Consolidated Statements of Operations was $109 million, $103 million and $72 million in 2010, 2009 and 2008,
respectively. The related income tax benefit was $43 million, $40 million and $28 million in 2010, 2009 and 2008, respectively.

Stock
Options

We
grant nonqualified stock options to certain team members under the Plan that generally vest and become exercisable annually in equal amounts over a
four-year period and expire 10 years after the grant date. We also grant options to the non-employee members of our Board of Directors which vest immediately and become
exercisable after one year with a term equal to the lesser of 10 years from date of grant or 5 years following

We use a Black-Scholes valuation model to estimate the fair value of the options at grant date based on the assumptions noted in the following
table. Volatility represents an average of market estimates for implied volatility of Target common stock. The expected life is estimated based on an analysis of options already exercised and any
foreseeable trends or changes in recipients' behavior. The risk-free interest rate is an interpolation of the relevant U.S. Treasury security maturities as of each applicable grant date.